It is therefore important to detect such risks at an early stage and to systematically identify them, determine their relevance and assess the risk that they pose. As the frequency and severity of these risks in several cases are completely unknown, the traditional risk identification and monitoring processes will not work. Specific strategies and approaches must be implemented to cope with them properly, as there are typically no historical data for risk managers and underwriters to rely on.
As an integral part of its risk managing process, Hannover Re has established the research group "Emerging Risks and Scientific Affairs". The group identifies, evaluates and monitors these emerging risks. An additional task for this interdisciplinary group is to translate science into insurance terms to close the gap between ever-increasing speed in scientific progress and day-to-day underwriting and risk management.
The general concern about risks is described in a paper on "Emerging Risks in the 21st Century" published by the OECD back in 2003:
