Driverless cars, robots, 3D printing, borderless digital businesses and innovations such as drones all promise to transform our world, but are accompanied by unforeseeable risks. This revenge effect of science and technology is well documented: DDT was once hailed as an efficient pesticide, asbestos curtains a great way to prevent theater fires and the hydrogen laden Hindenburg had a smoker’s lounge, for example.
Edward Tenner, author of Why Things Bite Back, notes that technology is often the ultimate expression of unintended consequences. “It is not so much what can go wrong will go wrong, but when it goes wrong it can do so spectacularly,” he says.
As in the past, innovations now being enthusiastically adopted will have benefits – and some nasty surprises – beyond those imagined. From an insurance perspective though, future influencers can be partially identified. Automation, for one, is likely to expose machinery and component manufacturers, as well as software providers, to increase in product liability.
“From data, we can identify future influencers,” says Alexander Mack, Allianz Global Corporate & Specialty (AGCS) Board Member and Chief Claims Officer. “The recent ‘Allianz Global Claims Review’ highlighted how the ever-growing reliance on technology is creating risks with large liability claims becoming ever more expensive, complex and international in scope.
The positive news, says Mack, is that, broadly speaking, “the frequency of claims is expected to decline, although the complexity of threats, such as cyber, product liabilities and recall risks, is increasing.” Business models in the digital economy are without borders, he explains, making liability harder to apportion and claims more complex to settle.