Emerging risks evolve through three phases: emerging interest, emerging damage and emerging litigation.
During the “emerging interest” phase, scientists, regulators or legal scholars first flag the potential for the risk to harm humans or the environment and publish their findings. In some cases, these initial studies seed larger scientific literatures that investigate the harms in depth and examine the pathways of exposure, causing the risk to enter the “emerging damage” phase.Executive SummaryOut of hundreds of risks being investigated by scientists, most are likely to be safe and few will ever see litigation. That means that reacting to these risks at an early “emerging interest” stage by taking underwriting actions has a big downside, Praedicat executives advise. Here, they also describe the too-late “emerging litigation” stage and the just-right “emerging damages” stage, highlighting one particular chemical compound in that middle stage—melamine—explaining that carriers now have an opportunity to take actions to manage and price the risk while still writing it.