 | Sandra Said is the Vice President and Head of Global Enterprise Risk Management (ERM) Operations and Reporting at Reinsurance Group of America, Incorporated (RGA). |
Paul Carroll
How does RGA define an emerging risk?
Sandra Said
RGA defines an emerging risk as a new or evolving risk that is difficult to assess and could impact the life and health insurance industry and RGA’s strategy.
Paul Carroll
What are some of the most significant emerging risks facing (re)insurers today?
Sandra Said
The risk landscape continues to evolve rapidly, shaped by a widening array of economic and social forces. Many of these risks are increasingly systemic and interconnected.
Among the most significant emerging risks are AI-related, geoeconomic confrontation, unsettled regulatory and legal environments, technological acceleration, and global inflation shocks. Each of these risks present unique challenges that can impact the stability, operations, and strategic direction of (re)insurers globally.
Paul Carroll
How does AI pose a risk to the insurance industry?
Sandra Said
Threat actors are increasingly using AI to rapidly adapt attack methods and deploy sophisticated tools, such as deepfake voice and image generation capabilities. This escalation in AI-enabled cyberattacks is creating a growing risk of more frequent and damaging cyber incidents. AI-enhanced threats are a growing concern due to their ability to adapt quickly, evade detection, and autonomously exploit vulnerabilities.
For (re)insurers, this means a higher frequency and intensity of attacks and increased risk of data breaches, operational disruptions, and reputational damage. Since the industry relies heavily on secure digital infrastructure for several core processes, a successful cyberattack could undermine financial stability and erode client trust.
(Re)insurers should continue to educate employees about deepfakes and social engineering, proactively monitor adversarial tactics, and protect data to prevent attacks. Companies should, among other things, adapt processes involving financial transactions or sensitive data transfer to include multiple verification steps for appropriate mitigation.
Paul Carroll
Can you explain the impact of geoeconomic confrontation on (re)insurers?
Sandra Said
The risk of increased tension among some major global economies, including political polarizations, may have a negative impact on global trade and growth. Trade tensions, economic sanctions, and shifting alliances can disrupt international business relationships and cause shifts in economic conditions. For (re)insurers operating globally, this can lead to currency fluctuations, market volatility, and challenges in complying with differing regulatory requirements across regions. Increasing uncertainty means decisions may need to be made before all desired information is known. These factors may increase operational costs and require nimble risk management strategies.
Paul Carroll
Why is an unsettled regulatory and legal environment considered a major risk?
Sandra Said
Regulatory changes across jurisdictions can affect financial institutions’ operating models, business operations, and capital requirements, to name a few. The evolving landscape, especially regarding data privacy and emerging technologies, demands constant vigilance and adaptation. Increased compliance requirements may create a drain on financial resources, while non-compliance can damage reputation and attract regulatory scrutiny.
While regulatory shifts can drive innovation, they may also introduce complexity and uncertainty, potentially impacting strategic decisions and financial performance.
(Re)insurers may need to prioritize strategies for proactive regulatory engagement, integrating government relations into business units and anticipating regulatory obligations to stay ahead of changes.
Paul Carroll
How does technological acceleration affect (re)insurers?
Sandra Said
Rapid technological change brings both opportunities and threats. (Re)insurers need to develop and retain the right talent – those who have the technical skills along with the knowledge of the company, its technical capabilities, and its ways of working. Ensuring a talent pipeline exists within the organization is key, including robust succession planning to build the next generation of digital skills necessary following retirements and attrition.
The experience and skills needed to build emerging technology solutions are in high demand to support changing business needs. The challenge lies in integrating new technologies effectively; failure to do so can impact competitiveness and operational efficiency. Increased digitalization also heightens the importance of data privacy and regulatory compliance.
(Re)insurers may take a proactive approach to technology adoption, while balancing innovation exploration (through monitoring and proof-of-concepts) with security and compliance considerations.
Paul Carroll
What steps can (re)insurers take to address these emerging risks?
Sandra Said
Agile and responsive risk management is essential. Integrating emerging risk insights into strategic planning and developing targeted action plans is no longer a “nice-to-have”; it is a strategic imperative. Equally, fostering a culture of risk awareness and knowledge sharing helps ensure emerging risks are openly communicated throughout the organization.
At RGA, we have designed and implemented an online platform for enterprise-wide collaboration and information sharing. Education sessions delivered by subject matter experts throughout RGA help cascade knowledge about these emerging risks across the enterprise. Such proactive engagement with cross-functional experts and ongoing education can help organizations anticipate challenges, seize opportunities, and maintain a competitive edge in a complex global environment.
In addition, scenario analysis enables (re)insurers to evaluate how emerging risks might impact their business under different future conditions. By conducting this analysis, organizations can develop proactive strategies and contingency plans to ensure readiness when these scenarios materialize. They also can – and should – establish early warning indicators that serve as alerts when potential risk scenarios begin to unfold.