Insurers and reinsurers alike should be wary about risks stemming from the new 5G mobile networks now being installed around the world, Swiss Re warns in its bi-annual SONAR report.
You’ve heard about 5G, the new standard for cellular mobile communications designed to give customers super-fast broadband connections, sharper cell phone service and better wireless connectivity for Internet of Things/connected device technology such as autonomous cars. Swiss Re said 5G, along with its potential, presents plenty of added risks ranging from new health concerns to cyber exposure worries and political risks.
Radiation and Cyber Risks
Swiss Re said that a functional 5G network would likely need more antennas, which, by default, could produce higher levels of electromagnetic radiation. That’s not a good trend for folks that worry about health concerns and technology.
“Existing concerns regarding potential negative health effects form electromagnetic fields are only likely to increase,” Swiss Re notes in its report. “An uptick in liability claims could be a potential long-term consequence.”
Along with health concerns, the advance of 5G networks also boosts anxiety about cyber risks, which Swiss Re said will grow “with the wider scope of 5G wireless attack services.” IoT devices typically are hackable anyway, Swiss Re said, but hackers can do even worse damage with 5G added to the picture.
“Hackers can … exploit 5G speed and volume, meaning that more data can be stolen much quicker,” Swiss Re said in its report. Considering Internet of Things technology applies to everything from autonomous cars and home security, Swiss Re warns that security features for both must be increased to address the added risk.
“Without [doing so], interruption and subversion of the 5G platform could trigger catastrophic cumulative damage,” Swiss Re said.
In turn, a switch to added automation made possible by 5G and related technologies might nudge the market into adapting to the trend with added general and product liability insurance, according to Swiss Re.
Privacy and Espionage
These aren’t the only 5G related worries about emerging risks, however. Swiss Re said that the technology will generate new privacy concerns, contribute to additional security breaches and even trigger espionage worries, due to the technology specifications.
“The focus is not only on hacking by third parties, but also potential breaches from built-in hard or software “backdoors,”” Swiss Re’s report asserts.
Swiss Re said that the potential for espionage or sabotage along could adversely affect international cooperation and also the performance of financial markets.
What’s more, only a few companies are currently developing 5G infrastructure, and Swiss Re said that the risk of heavy concentration of so few firms on the 5G upgrades is a problem itself, should anything go wrong, limiting options for repair and risk management.
The Swiss Re Sonar report identifies emerging risks that can adversely affect insurers and reinsurers in 2019. Beyond 5G technology, the report’s other risk focuses include: the advance of new technologies into aging infrastructure, limits to central bank tinkering, the growth of genetic testing and climate change/public health.
Source: Swiss Re