#USA #Climate Change #Arlington #Emerging Risks #Geopolitical Instability

The Top Concerns of Risk Managers for 2025

In the ever-evolving landscape of risk management, the latest findings from the 18th Annual Emerging Risk Survey conducted by the Casualty Actuarial Society (CAS) and the Society of Actuaries (SOA) shed light on the pressing concerns that risk managers face as we move into 2025. This year’s report, published on February 4, 2025, reveals a dominant focus on climate risks, disruptive technology, and geopolitical instability as the leading emerging threats.

The Survey's Background

The survey involved 201 participants, primarily risk managers from North America, with additional insights contributed by professionals from Europe, South America, Asia, Africa, and the Caribbean. To ensure a broad perspective, the CAS and SOA will perform a mid-year flash survey in May 2025, aimed at tracking any shifts in these concerns.

Climate Risks Take Centre Stage

Climate change has consistently been a focal point of risk discussions for several years. Since 2021, it has remained at the forefront of the emerging risk lists. However, for the first time in 2024, it shares the spotlight with geopolitical instability, which highlights the complex interplay of these two critical factors. Events such as hurricanes Milton and Helene, as well as ongoing conflicts in Ukraine and the Middle East, underscore the urgency of these risks. In fact, risk managers are increasingly recognizing that the implications of climate change extend beyond environmental concerns, significantly impacting economic stability and public safety.

Disruptive Technology on the Rise

Another major theme emerging from the survey is the role of disruptive technology, particularly artificial intelligence. As AI technology continues to advance rapidly, its risks—such as cybersecurity threats and manipulation—have climbed to the forefront of managerial concerns. This year's survey indicates a notable upward trend in the emphasis on technological risks, reflecting the profound impact of recent developments in AI across various industries.

Geopolitical Instability

The survey also highlighted a significant shift toward an increased focus on geopolitical instability. Risk managers are increasingly aware of the consequences that civil wars and other forms of geopolitical conflict can have on businesses and entire markets. This growth in concern regarding geopolitical risk contrasts against the backdrop of waning interest in risks associated with failed states—a trend that had seen lower frequency in mentions since the 2010s but has surged back into discussions from 2023 onward.

Financial Volatility and Asset Price Collapse

Interestingly, concerns surrounding asset price collapse and financial volatility have reached historic lows in the latest findings. This apparent decrease in emphasis on financial risks could reflect broader market stabilization or may suggest a shift in risk managers' focuses toward more immediate and impactful challenges.

Implications and Looking Ahead

The insights gleaned from this survey not only provide a snapshot of current risk sentiment but also highlight the imperative for risk managers to remain vigilant in these changing times. With climate uncertainties, technological advancements, and geopolitical tensions poised to impact various sectors, staying informed and proactive is crucial for those at the helm of risk management.

In summary, the findings of the CAS and SOA survey underscore the complex landscape of emerging risks that professionals must navigate as 2025 unfolds. As risks evolve, so too must the strategies employed by risk managers to safeguard their organizations and stakeholders from unforeseen challenges.