Nano Risk Management: Insurance Industry Position Paper
Nanotechnology presents the insurance and risk management industries with significant challenges and opportunities. Central to these are the relatively unknown environmental, health and safety exposures arising from nanomaterials through their life cycle. The insurance industry seeks to foster opportunity while not ignoring the risks associated with nanotechnology. The insurance industry’s primary interest is to achieve a greater understanding of nanotechnology hazards in order to promote risk awareness, risk management and above all, insurability.
Nanomaterials may present different toxicity when compared to their macro counterparts and exposure to hazard may arise in new ways. The toxicity of materials in an unmodified macro state does not necessarily correspond to toxicity in the nanostate, nor can we rely on outdated environmental health and safety regulations or outmoded risk mitigation protocols.
This uncertainty has a direct impact on the potential effectiveness of risk management, the availability of insurance risk transfer products, and the ability of insurers to establish suitable reserving practices. The insurance and risk management industries have an opportunity to collaborate with other nanotechnology stakeholders to close knowledge gaps as quickly as possible in four key areas:
- Nanotechnology risk and safety analysis standards
- Environmental, health and safety (EHS) hazards research
- Regulatory alignment
- Proprietary risk assessment
The nanotechnology position paper suggests a prudent approach to the relatively unknown risks caused by nanomaterials. It finds that nanotechnology has tremendous potential to create new and innovative products. This presents the insurance industry with significant challenges and opportunities. The paper recommends that assessing risk over the life cycle of these nanomaterials should be standard practice for the nanotechnology industry, as well as for their insurers and reinsurers.
The paper goes on to recommend that insurers should remain engaged and well-informed about nanotechnology risk and safety standards; environmental, health and safety (EHS) hazards analysis; regulatory alignment and proprietary risk assessment. Emphasis should be given to small and medium sized enterprises regarding workplace safety and loss prevention.
The CRO Forum is a professional risk management group that focuses on developing and promoting industry best practices in risk management. The forum was formed in 2004 to work on key relevant risk management issues within the insurance industry.
Represented by Chief Risk Officers of the various members, the CRO Forum tends to work on topics of a more technical nature. Due to the fact that the forum's members are large multi-national insurance companies, the CRO Forum is generally perceived as leaders within the industry with respect to valuation, risk measurement, and risk management.
The forum intends to represent large insurance company views, with three core aims:
- Alignment of regulatory requirements with sophisticated / best practice risk management;
- Acknowledgement of group synergies, especially diversification benefits; and
- Simplification of regulatory interaction.
Source: CRO Forum (link not available anymore)
Download the paper: http://www.croforum.org/publication/eri_nano/