As the Arctic Ocean and adjacent land warm up (up to three times faster than the rest of the globe), the ice is melting, opening up new shortcuts for shipping routes — but in a hotspot for potential geopolitical tension, provoking concerns over how economic activities and related risks will be controlled in the region.
This opening up of previously frozen waterways is amongst the risks identified in Swiss Re’s latest horizon-scanning report.
The 11th edition of SONAR draws attention to a multi-faceted emerging risk landscape — highlighting the cyber risks of artificial intelligence, and the potentially significant risks posed by solar radiation management technology.
The potential use of SRM technology to help lower global temperatures could open up an entirely new set of environmental risks, as well as the potential for international conflicts, the report’s authors warn. Techniques such as injecting highly reflective particles into the atmosphere to reflect sunlight back into space, if implemented and then suddenly terminated, could lead to fast temperature increases with unpredictable weather effects.
Meanwhile, complex machine learning systems and AI are driving the next wave of technological advances… and risks. Professional hackers can not only trick models into making mistakes or leaking information; they can also harm model performance by corrupting training data or stealing and extracting machine learning models.
Swiss Re’s latest SONAR report emphasises how the rise of AI is increasing opportunities for fraud and intellectual property loss, such as phoney creditworthiness ratings or false insurance scores. In car insurance, AI-based claims management systems may even be tricked into seeing massive damage where there is none. If AI gets hacked, it could even result in physical harm by causing autonomous car crashes or medical misdiagnoses.
Commenting on the emerging risk landscape, Patrick Raaflaub, Swiss Re’s group chief risk officer, said: “The concurrent increases in economic interests, environmental change and geopolitical tensions make the Arctic a hotbed for emerging risks and potential risk accumulation. With SONAR, we aim to proactively engage our clients and industry stakeholders in discussion of emerging risks, as we find this is the best way to be prepared.”
