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New Coalition to Tackle Multi-Billion Dollar Risks of Fourth Industrial Revolution

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To avoid catastrophic levels of uninsured risk in the innovation economy, the insurance industry is joining forces with technology companies and governments in a World Economic Forum-led initiative, Mitigating Risks in the Innovation Economy.

In a joint report launched today, the working group lays out the risks and goals, including:

  • Closing the gap in existing governance frameworks to manage risks from innovations
  • Determining the liabilities, roles and responsibilities involved with these risks
  • Setting up a data-sharing mechanism to manage the risks

“No one currently knows the magnitude of the risk exposure of society to new, uninsured technologies,” said Victoria Shirazi, Project Lead of the Mitigating Risks in the Innovation Economy project at the World Economic Forum. “A technology failure that was once both small and contained can cascade into potentially catastrophic losses. This initiative will help societies prevent, respond to and recover from these new risks.”

The insurers point to potential risk scenarios of emerging risks with vastly varying estimated costs:

  • A cyber-attack on the US Northeast electrical grid could result in economic losses as high as $222 billion
  • A disruption of the cloud could result in economic losses ranging from $15.6 billion to $121.4 billion
  • A compromised software upgrade for globally interconnected systems could put between $4.5 trillion and $15 trillion of global GDP at risk over five years due to losses to global GDP output

The majority of these and other innovation-related risks are uninsured: the insurance gap is as high as 83% in a cloud service disruption scenario and 93% for a mass vulnerability setting. Other risks are yet unknown.

“As technologies emerge on their own, the risks are becoming so big and complex that businesses and governments will not be able to handle them, said Inga Beale, Chief Executive Officer of Lloyd’s, and a backer of the initiative. “With this initiative, we want to address that.”

Among the participants in the initiative are some of the world’s largest insurers and insurance brokers, including Allianz, Lloyd’s, Marsh & McLennan, Sompo Holdings, Swiss Re, Willis Towers Watson, XL Catlin and Zurich Insurance Group; technology companies such as Cisco, Hitachi, IBM and Siemens; and senior officials from the European Commission, India, Japan, Netherlands, Singapore, Switzerland, United Kingdom and the United States.

Consumers face two stark realities that the group needs to resolve, said Matthew Leonard, Partner at Oliver Wyman, and member of the initiative: “First, people do not fully understand the risks they are running; and second, those who seek to mitigate their risk with insurance are faced with a decided lack of choice and/or affordability.”

The members of this initiative have committed to further multistakeholder actions to be developed and piloted in 2018, starting at the World Economic Forum Annual Meeting in January. The report and joint initiative were prepared by the Forum in collaboration with Oliver Wyman. Throughout the process, the insurance industry will also explore how it can best fulfil its new capacities, such as risk advisory and analytics.

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Guterres: Korean nuclear crisis, Middle East quagmire eroding global security

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Credit: Wikimedia Commons

“Conflicts are becoming more and more interrelated and more and more related to a set of a new global terrorism threat  to all of us,” Mr. Guterres said in his keynote address at the opening ceremony on Friday of the Munich Security Conference.

For the first time since the end of the Cold War, the world is facing the threat of nuclear weapons and long-range missiles posed by the Democratic People’s Republic of Korea (DPRK), which he called “a development made in total contradiction to the will of the international community and in clear violation of several resolutions of the Security Council.”

He said that it was essential to maintain “meaningful pressure over North Korea” to create an opportunity for diplomatic engagement on the peaceful denuclearization of the Korean peninsula within a regional framework.

“The two key stakeholders in relation to this crisis, the United States and [DPRK]” must be able to “come together and have a meaningful discussion on these issues,” he said, adding that it is “important not to miss the opportunity of a peaceful resolution through diplomatic engagement as a military solution would be a disaster with catastrophic consequences that we cannot even be able to imagine.”

The situation in the broader Middle East, which the UN chief said had become a “Gordian knot,” was also eroding global security, with that are crises that are “crossing each other and interconnected.”

Pointing to the Palestinian-Israeli conflict, and wars in Syria, Yemen and Libya, among others, Mr. Guterres said the entire Middle East has “became a mess,” with varied and intersecting fault lines.

He warned of the absence of a common vision in the region and said that even if interests are contradictory, the threats these conflicts represent would justify some efforts to come together.

Turning to cyber-security, Mr. Guterres called for a serious discussion about the international legal framework in which cyberwars take place.

“I can guarantee that the United Nations would be ready to be a platform in which different actors could come together and discuss the way forward, to find the adequate approaches to make sure that we are able to deal with the problem of cybersecurity,” he said, noting that artificial intelligence provides “enormous potential for economic development, social development and for the well-being for all of us.”

The Secretary-General said that Governments and others have been unable to manage human mobility. He warned that this had created mistrust and doubts about globalism and multilateralism.

“This is a reason why,” he said, “we need to be able to unite, we need to be able to affirm that global problems can only be addressed with global solutions and that multilateralism is today more necessary than ever.”

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Supporting tourism development in Africa through better measurement

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In an effort to better measure tourism growth and development in Africa, UNWTO signed a Cooperation Agreement with the Nigeria Tourism Development Corporation for the Strengthening of the National Tourism Statistical System of Nigeria and the Development of a Tourism Satellite Account.

UNWTO is committed to developing tourism measurement for furthering knowledge of the sector, monitoring progress, evaluating impact, promoting results-focused management, and highlighting strategic issues for policy objectives.

On the occasion of the meeting between UNWTO Secretary-General, Zurab Pololikashvili, and the Minister of Information and Culture of Nigeria, Mr. Lai Mohammed, the agreement to host the Sixty-First meeting of the UNWTO Commission for Africa and the Seminar on ‘Tourism Statistics: A Catalyst for Development’ in Nigerian capital, Abuja, from 4 to 6 June 2018, was signed.

The meetings will be open to the participation of UNWTO Member States and Affiliate Members, as well as invited delegations and representatives of the tourism and related sectors. Officials of immigration departments, national statistics bureaus, central banks and other relevant stakeholders will be invited to join.

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Causes of Rohingya refugee crisis originate in Myanmar- solutions must be found there

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“We are now in a race against time as a major new emergency looms,” United Nations High Commissioner for Refugees Filippo Grandi told the Security Council via videolink from Geneva, Switzerland.

He said that the Kutupalong area in Bangladesh’s Cox’s Bazar is now the largest refugee settlement in the world, and with the monsoon season to start in March, 107,000 refugees are estimated to be living in areas prone to flooding or landslides.

“The [Bangladeshi] Government is steering a massive emergency preparedness effort, but international support must be stepped up to avert a catastrophe,” he said, stressing that “as we have repeatedly said, resolving this crisis means finding solutions inside Myanmar.”

He said that conditions are not yet conducive to the voluntary repatriation of Rohingya refugees to Myanmar.

The refugee crisis erupted in late August when Myanmar armed forces launched a security operation in the north of Rakhine State, driving thousands of children, women and men to flee over the border to Bangladesh in search of safety.

“The causes of their flight have not been addressed, and we have yet to see substantive progress on addressing the exclusion and denial of rights that has deepened over the last decades, rooted in their lack of citizenship,” Mr. Grandi said.

“It is time to bring an end to this repeated, devastating cycle of violence, displacement and statelessness to invest in tangible, substantial measures that will start to overcome the profound exclusion that the Rohingya community have endured for far too long,” he added.

Also addressing the Council was UN Assistant Secretary-General for Political Affairs Miroslav Jenca, who said that while there has been certain progress on the three priorities laid out by the Secretary-General, not all have been implemented thus far.

Turning first to the need to end violence and improve the security situation, he said that although large-scale acts of violence have subsided, concerns about threats and intimidation against the remaining Rohingya population from Bamar and Rakhine communities, as well as from militia and security forces in Rakhine state, persist.

Second, the UN does not have sufficient access to make a meaningful assessment of the humanitarian or human rights situation in Rakhine.

As for the third point, which is voluntary, safe, dignified and sustainable return of refugees and internally displaced people to their places of origin or choice, Mr. Jenca said the Government has taken some high-level steps to advance this process, including the convening of an Advisory Board, whose recommendations include the inclusion of the UN at an early stage, soonest full humanitarian access, wider media access, and the formation of an independent fact-finding commission.

Mr. Jenca called on the authorities in Myanmar to release the arrested two Reuters journalists and respect the right to freedom of expression and information.

Reuters has now published the story these journalists were working on, a deeply disturbing account of the execution of 10 Rohingya men in Inn Din village (Maungdaw) in northern Rakhine state,he said, while the Associated Press (AP) has also published a report of five mass graves in Gudar Pyin village (Buthidaung).

“These and other shocking reports of grave abuses demand our attention and action, for the sake of lasting peace and justice,” he said.

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