The reinsurance firm Swiss Re is rather farther along on nanotechnology, but Lloyd’s of London is starting to step up to the question of how to insure nanotech. They had a recent conference to launch their new report Nanotechnology: Recent Developments, Risks and Opportunities (PDF). As one would expect, it mainly focuses on nanoparticles, but more advanced prospects are mentioned:
Nano-electrical mechanical systems (NEMS) are effectively nano-sized machines that currently perform simple tasks. This type of nanotechnology is currently one of the closest analogies to nano-sized robots, the other type being biological nano-machines that are made from biological molecules. These can produce nano-sized motors and sensors. Applications for NEMS could be very broad for example monitoring the environment or even medical nano-robots for targeting cancers or repairing tissues. These examples are still very much in the preliminary or theoretical stage, but once developed could have a huge impact.
Benefits are identified, from the insurance perspective:
Aside from providing a new industry to insure, it is also important to note that nanotechnology could also bring direct benefits to risk mitigation in the form of new materials that are stronger or more adaptive than before. Cars could be made to absorb more of the impact during a crash; building materials could be made stronger and more flexible to resist damage from earthquakes, fire, flood and corrosion. Environmental cleanup operations could be made easier and cheaper with the use of specialised nanoparticles. Medicine could also be transformed by nanotechnology allowing cheaper and more sensitive diagnostic tools for diseases giving insurance professionals better statistics to determine pricing. Most of these examples are not realised as yet, but a significant amount is being invested worldwide each year to develop products like these.
And a summary of the main issue for insurers:
There is a danger that nanotechnology could lead to unforeseen and negative impacts but they could also lead to many positive impacts and these should be weighted up in deciding any regulation in future. However, as the insurance industry is often only exposed to the downside, it must protect its long term solvency for the benefit of society as a whole. Our exposure to nanotechnology must therefore be considered and examined very carefully.
Insurers could play a helpful role in nanotech safety going forward. Let’s encourage that, however we can. —Christine