Tag Archives: insurance

Underwriting nanotechnology: a webinar for the insurance industry

The US National Nanotechnology Coordination Office (NNCO) is hosting a free webinar “Nanotechnology and the insurance industry” according to a Sept. 9, 2016 NNCO news release,

The National Nanotechnology Coordination Office (NNCO) will hold the next in its series of free webinars addressing challenges in commercializing nanotechnology on Thursday, September 22, 2016, from 1 to 2 PM EDT. This webinar will focus on the insurance industry and the challenges of underwriting nanotechnology and other emerging technologies. NNCO Director Dr. Michael Meador will moderate the webinar discussion.

Speakers:

  • Allen Gelwick, Executive Vice President of the Lockton Companies. Mr. Gelwick is a leading insurance expert and has been active in the nanotechnology community for over ten years.
  • Christie Sayes, Associate Professor of Environmental Science and Toxicology at Baylor University. Dr. Sayes is a subject matter expert in nanomaterial-related toxicology and exposure.
  • David Swatzell, Managing Partner at Knowtional, a management consulting firm. Mr. Swatzell is a business strategy expert in IT and other high-tech industries. Prior to joining Knowtional, he held various senior positions at Hewlett-Packard and other technology firms.
  • Madhu Nutakki, Digital Chief Technology Officer, Innovation & Mobile Delivery, at AIG. Mr. Nutakki develops digital strategies from concept to implementation at AIG, one of the world’s largest insurance companies.

Audience:  Representatives of the insurance industry, the nanotechnology business community, and interested members of the general public, media, academia, industry, NGOs, and Federal, State, and local governments are encouraged to participate.

Why: To engage in a dialogue about insurance and risk issues of interest to the nanotechnology and insurance communities through a free, online format.

How: Invited speakers will begin the event by providing an overview of their experiences, successes, and challenges in insuring and underwriting products based on nanotechnology and other emerging technologies. Questions for the panel can be submitted to webinar@nnco.nano.gov from now through the end of the webinar at 2 PM on September 22, 2016.

Registration:  This webinar is free and open to the public with registration on a first-come, first-served basis. Registration is now open and will be capped at 500. To register, visit https://nnco.adobeconnect.com/e2lmvye37yw/event/registration.html

h/t for webinar information to Nanowerk Sept. 9, 2016 news item.

Lloyd’s Register and nanotechnology-enabled safety on the high seas, on land, and in the air

On seeing the name Lloyd’s Register and noting the funding is for a university in the UK, Lloyd’s of London, the venerable insurance company leaped to mind. Although there is a connection of sorts, it is somewhat attenuated. First, here’s the news from a Sept. 4, 2015 news item on Azonano,

The University of Southampton has been awarded a multi-million grant from Lloyd’s Register Foundation to bring together some of the world’s brightest early career researchers to find new ways of using nanotechnologies to improve safety at sea, on land and in the air.

A Sept. 3, 2015 University of Southampton press release, which originated the news item, describes plans for the funding,

Dr Themis Prodromakis, from the Nanoelectronics and Nanotechnologies Group at Southampton, is leading the £3m programme, which will receive match funding from partner organisations. He says: “Researchers are always looking for funding for high risk, high reward ideas. They want to collaborate with the best scientists and engineers in the world and gain access to state-of-art facilities. The Lloyd’s Register Foundation International COnsortium in Nanotechnologies (ICON) [Note: This is not to be confused with the now defunct {since Sept. 2014} International Council on Nanotechnology {ICON} at Rice University in Texas, US] will assemble the world’s leading universities, research institutions and innovative companies to help them tackle many of today’s most challenging issues by recruiting talented PhD students from every continent.”

Applications will soon be invited from scientists and engineers keen to pioneer research across a range of industries. Nanotechnologies are already widely used, for example in smart phones, cameras and gadgets. Breakthroughs already being developed include cars, boats and planes built from lightweight materials stronger than steel with new functions such as self-cleaning and repairing; flexible textiles that can become rigid and shockproof to protect the wearer; sensors in hostile environments such as the deep ocean and space; tiny implants for real-time monitoring to aid diagnoses for doctors; and smart devices that harvest energy from their environment.

ICON will support more than 50 PhD students to undertake research at leading global universities, aided by matched funding. They will work together with partners from industry on interdisciplinary projects and access world-leading facilities, such as the £120m Southampton Nanofabrication Centre. The doctoral researchers will meet every year to present their findings and share ideas and concepts, becoming part of a global doctoral cohort addressing the Foundation’s safety mission.

Professor Richard Clegg, Managing Director of Lloyd’s Register Foundation, said: “We are pleased to support the University of Southampton in developing this global cohort of scientists. Their research will develop applications to further the Foundation’s safety goals whilst also providing training and building technical capacity in support of our educational mission. The doctoral students joining this consortium will gain an understanding of how their research can benefit society whilst developing international research networks at an early stage in their careers.”

“The support of Lloyd’s Register Foundation is key to our mission,” adds Dr Prodromakis. “Lloyd’s Register itself is well-known for promoting safety worldwide for more than 250 years. Its Global Technology Centre is now based in Southampton and its Foundation has become a catalyst to support research, training and education for the benefit of society. We are delighted to work alongside them.”

As for the connection between Lloyd’s Register and Lloyd’s of London, let’s start with the Lloyd’s Register Wikipedia entry (Note: Links have been removed),

The organisation’s name came from the 17th-century coffee house in London [emphasis mine] frequented by merchants, marine underwriters, and others, all associated with shipping. The coffee house owner, Edward Lloyd [emphasis mine], helped them to exchange information by circulating a printed sheet of all the news he heard. In 1760, the Register Society was formed by the customers of the coffee house who assembled the Register of Shipping, the first known register of its type. Between 1800 and 1833, a dispute between shipowners and underwriters caused them to publish a list each—the “Red Book” and the “Green Book”.[3] This brought both parties to the verge of bankruptcy. Agreement was reached in 1834 when they united to form Lloyd’s Register of British and Foreign Shipping, establishing a General Committee and charitable values. In 1914, with an increasingly international outlook, the organisation changed its name to Lloyd’s Register of Shipping.

Now here’s what Lloyd’s of London has to say on its History webpage,

In the 17th century, London’s importance as a trade centre led to an increasing demand for ship and cargo insurance. Edward Lloyd’s coffee house [emphasis mine] became recognised as the place for obtaining marine insurance and this is where the Lloyd’s that we know today began.

From those beginnings in a coffee house in 1688, Lloyd’s has been a pioneer in insurance and has grown over 325 years to become the world’s leading market for specialist insurance

Today, Lloyd’s Register describes itself this way (from the Lloyd’s Register homepage),

Lloyd’s Register (LR) is a global engineering, technical and business services organisation wholly owned by the Lloyd’s Register Foundation, a UK charity dedicated to research and education in science and engineering. Founded in 1760 as a marine classification society, LR now operates across many industry sectors, with over 9,000 employees based in 78 countries.

We have a long-standing reputation for integrity, impartiality and technical excellence. Our compliance, risk and technical consultancy services give clients confidence that their assets and businesses are safe, sustainable and dependable. Through our global technology centres and research network, we are at the forefront of understanding the application of new science and technology to future-proof our clients’ businesses.

Well, future-proofing sounds good doesn’t it? It seems like a way of saying you might be able to ‘insure’ yourself against future turmoil.

Ernst & Young includes nanotechnology and other emerging technologies in its 2014 US property-casualty insurance outlook

There’s a Dec. 17, 2013 news item on the CanadianUnderwriter.ca website highlighting a 2014 property-casualty report from Ernst & Young (EY) that mentions nanotechnology ,

Ernst & Young LLP is predicting a rise in demand for certain types of insurance, such as cyber and nanotechnology.

The consulting firm announced Tuesday [Dec. 17, 2013] the release of the EY 2014 US Property-Casualty Insurance Outlook, which recommends that P&C carriers “invest in innovation of product development processes and delivery to meet rising demand for protection.”

For example, according to the report, a lack of “any meaningful history” with nanotechnology indicates that potential risks are not easy to assess.

I located the 12 pp. EY 2014 US Property-Casualty Insurance Outlook to take a closer look at what it had to say about emerging technologies such as nanotechnology,

To solidify recent gains and defend against new risks and challenges, US property-casualty companies must augment their focus on margin protection and operating effectiveness in 2014. Successful companies must:
• Double down on broad-based, transformative technology with high ROI [return on investment] impact
• Adopt a complete range of enterprise data excellence
Invest in innovation of product development processes and delivery to meet rising demand for protection [emphasis mine]
• Exploit segment differences for targeted growth strategies
• Get out in front of emerging investment challenges
• Prepare for escalation of governance and accountability (p. 3)

Nanotechnology is mentioned in the context of investing in innovation,

3. Invest in innovation of product development processes and delivery to meet rising demand for protection

Highly disruptive technologies are changing products, services and customer interactions across the economy. Consequently, new risks and insurance needs are emerging for consumers and the commercial marketplace. In many cases, these risks have a legislative or legal foundation for defining risk and coverage needs, thereby increasing awareness and focusing demand. To improve their ability to design and develop new products quickly and efficiently, as well as improve speed to market, many companies are leveraging technology a and enhanced customer-centric processes.

Risks requiring broader, cost-effective insurance industry solutions include:
•Cyber insurance.
The rapid increase in hacking incidents and data privacy liabilities has
surpassed the ability of most commercial enterprises to keep pace. Insurers can provide
increased coverage and loss mitigation services, applying data analytics and other
technologies to assist insureds.
• Catastrophe insurance.
The increasing uncertainty and volatility of catastrophes has heightened the demand for broader risk protection. The potential emergence of a private flood market augmenting the national flood insurance apparatus is a case in point. The rising flood exposure has also spawned greater demand for contingent business interruption coverage, particularly for supply chain exposures. Insurers also need to prepare for private terrorism coverage exposures, given a potentially limited
federal backstop.
• Workers’ compensation.
The changing health care market, particularly new services in partnership with employers for accelerated rehabilitation and cost-effective traumatic injury medical services, is demanding more effective insurance solutions.

Nanotechnology.
The emerging applications of nanotechnology in the manufacture or use of medicine, cosmetics, drug delivery, robotics, materials science and other products and systems create potential liability exposures. Examples include bodily injury (analogous to asbestos exposure) and environmental damage from nanoparticles escaping uncontrolled into the air or water supply. The lack of any meaningful history with this technology, as well as with the materials involved, indicate the potential risks cannot easily be assessed. [emphasis mine]
• Sensor technology.
The use of sensors in telematics and in consumer and industrial products can create increasingly integrated exposure information for insurers, while enhancing the ability to provide more cost-effective and targeted risk protection
for customers. Emerging technologies and products have led insurance and reinsurance organizations to establish centers of science to explore new approaches to risk measurement and mitigation. Companies are increasingly seeking executive talent that can drive and lead such new thinking and new approaches.

Customer perceptions of new or changing risks will guide coverage enhancements, possibly opening the market to new entrants that understand these risks. To effectively compete in this environment, companies will need to rationalize their current and often complex portfolios of products, employing technology to simplify the delivery and processing of their
product offerings, in addition to improving their response times. (pp. 6-7)

Ernst & Young does not offer any big surprises about nanotechnology and assessing risks for the insurance industry echoing earlier comments elsewhere such as those in an article I featured in my July 29, 2013 posting. Someone offered insights in a comment to that posting which might interesting as might links to other reports and articles about nanotechnology, risk, and insurance that I placed in the posting..

Insurance, nanotechnology, and risk

I’ve been meaning to do something on insurance and the nanotechnology industry for a while so I’m thankful to have stumbled across this July 15, 2013 article by Anya Khalamayzer, which concerns actuaries, for Property Casualty 360°,

“An emerging technology can leave insurers covering risks they never contemplated,” states the Casualty Actuarial Society (CAS) in a statement on this revolutionary occupation [nanotechnology].

Parr Schoolman, a CAS fellow and senior managing director at Aon Benfield, explains that despite the lack of definitive data on the nanotech industry, an actuary’s ability to analyze a situation can help insurers develop a product to cover a futuristic technology that has arrived on society’s doorstep.

“Working with limited data is exactly the area where actuaries add most value,” says Alex Krutov, president of Navigation Advisors, in an email to PC360. “In general, the ability to provide solid actuarial risk analysis can also help accelerate societal progress by making possible the development and introduction of new technologies and products that otherwise might be considered uninsurable and too risky.”

I find this bit from the article  interesting,

Krutov says, “Medical applications of nanotechnology are very promising.  At the same time, health and other risks of specific products based on nanotechnology have to be properly analyzed before any insurance underwriting decision is made.  While actuaries are not expected to be experts on nanotechnology or medicine, they provide the general framework for this risk analysis.”

It seems to me the only way a nonexpert could establish a general framework for risk analysis, as Krutov suggests, would be to read some of the literature and get reports from people who do have expertise. One has to wonder though, at what point a threshold, whatever it might be, is passed and something becomes insurable. For example, there’s Chad Mirkin’s therapeutic skin moisturizer breakthrough in July 2012, mentioned in my Penetrating the skin barrier posting,

Researchers at Northwestern University (Illinois, US) have found a way to deliver gene regulation technology using skin moisturizers. From the July 3, 2012 news item on Science Blog,

A team led by a physician-scientist and a chemist — from the fields of dermatology and nanotechnology — is the first to demonstrate the use of commercial moisturizers to deliver gene regulation technology that has great potential for life-saving therapies for skin cancers.

At what point, once the treatments have passed through clinical trials, does the treatment or the doctor giving the treatment become insurable? From the article,

Because nanotechnology has only been available since the 1984, and due to the cutting-edge speed at which it is being developed, reliable data describing its effects is often outdated. Furthermore, Kingdollar [Charlie Kingdollar, vice president and emerging issues officer of General Reinsurance Corporation] says more than 60 percent of firms and universities fail to conduct toxicity tests on nanomaterial.

According to the United States Environmental Protection Agency (EPA), nanomaterials are effective precisely because their size allows them to enter the body in ways not typically found in other chemicals: for example, through the blood-brain barrier or by crossing cell membranes.

Kingdollar appears to be suggesting uninsurability while at the same time noting possible future loopholes should companies insure some form of nanotechnology-enabled therapy or product.

A little digging unearthed this Dec. 17, 2012 news item on Nanowerk (Note: A link has been removed),

The article “Handling Nanotechnologies with foresight in the context of Liability insurance” (pdf), published by reinsurance company Gen Re, describes potential risks of nanotechnologies from the perspective of insurance companies and shows strategies for foresight handling.

The article concludes that “In summary it must be noted that our goal as an insurance industry should support highly profitable nanotechnologies from an underwriting perspective, but without losing sight of the considerable risk potential. This can only be achieved through risk identification, risk monitoring and risk analysis. Simply waiting until risk materialises could have significant consequences for the insurance industry.

… align both of those goals — support for nanotechnologies and justifiable limitation of the potential financial risks for the insurance industry. A step in the right direction could be to contain the problem of late claims, which are inherent with these technologies, by employing the claims made principle.”

While I find the jargon a little difficult, it does seem that another loophole is being developed in that last line about “employing the claims made principle.”

For further investigation, here’s a link to the 10 pp. article Handling Nanotechologies With Foresight in the Context of Liability Insurance by Richard Wieczorek for Gen Re.