The increasing adoption of artificial intelligence (AI) is posing new systemic risks for companies and insurers, warns a report by Swiss Re. The report, published on Friday, reveals that the proportion of companies mentioning AI and technology risks in their risk reports has risen by approximately 30 percent between 2019 and 2026. These companies are now spread across various sectors, including retail, aviation, and pharmaceuticals, rather than being predominantly from the technology sector, as noted by the Swiss conglomerate. This finding is based on an analysis by Swiss Re, in collaboration with the London School of Economics, which examined risk reports of multinational US corporations.
The report also highlights increased cumulative risks for insurers and reinsurers. Cumulative risks refer to events that simultaneously cause damage to multiple insured entities or individuals. These can include natural disasters and cyber risks. According to Swiss Re, three providers control around 70 percent of the world's cloud infrastructure and 97 percent of global credit card transactions. A failure in payment systems could significantly disrupt daily financial transactions, as stated in the report. Systemic strains could arise if such a disruption persists long enough to impact liquidity and payment processing.
For insurers and reinsurers, this concentration poses a cumulative risk, as a single outage or cyber incident could simultaneously lead to claims from otherwise independent insured parties across multiple business lines. "A company may initially appear broadly diversified, only to find that its suppliers, technology providers, and customers are all dependent on the same infrastructure," said Ivan Gonzalez, Chief Executive Officer of Corporate Solutions at Swiss Re.
The report also addresses the growing interdependence of risks for companies due to climate change and geopolitical fragmentation. Risk managers in large corporations, governments, and regulatory bodies are advised to invest more proactively in resilience against these next-generation systemic risks, the report states.
