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Emerging risk and resilience: Are you ready for the next crisis?

Look back through the past nine years of Emerging Issues Bracket Challenges, and what do you find? Levity? Certainly. Penetrating insight? Potentially.

But maybe also a view into human psychology and risk exposure.

Emerging Risk And Resilience

Many of the issues that pushed their way into the later rounds of the challenge had been on the radar of experts, risk managers, and insurers for years (if not decades) before they became acute concerns, or worse, full-blown crises.

The most obvious instance of this phenomenon is, of course, pandemic disease. The leading issue in both the 2020 and 2021 Emerging Issues Bracket Challenge had been eliminated in the first round of the challenge every year from 2014-18. While the precise timing and scope of any specific pandemic may be hard to predict, the threat of a global pandemic was on the radars of some leaders. In fact, a distinguished roll call of infectious disease experts, U.S. presidents, prominent business leaders, and popular culture, had previously sounded the alarm. 1,2.

It’s a similar dynamic with this year’s bracket leader, supply chain disruption. Optimized for lean inventories and just-in-time fulfillment, these far-flung supply chains are often a marvel of efficiency. And yet a single unfortunate cargo vessel was able to throw a Suez Canal-sized monkey wrench into the works, disrupting shipments around the world. 3 Indeed, long before anyone but the most devout preppers thought to hoard toilet paper, observers have been warning that the globalized supply chain was prone to severe disruptions.4 And not just for consumer goods: Strategic commodities such as rare earth minerals, oil, and semiconductors all figured prominently in pre-pandemic supply chain warnings. 5, 6, 7,  Time and again, it seems that we struggle to mitigate risks that we may acknowledge intellectually but haven't personally and viscerally experienced. It’s a theme that shows up starkly in the global insurance gap.

Each year, the world suffers an average of $216 billion in insurable losses, according to the latest estimate from Verisk. But of those losses, less than half ($106 billion) are actually insured. We don’t know if those stuck with the $110 billion tab have whatever the opposite of buyer’s remorse is. What we do know with reasonable certainty is that individuals and businesses collectively pay billions every year on losses that they could have transferred for likely far, far less money. The option to transfer the risks exist, and yet, it’s not exercised for much of these insurable losses.

Building resilience against emerging risks

Emerging Issues Bracket

Here’s an interesting thought experiment: Pick an issue on an Emerging Issues Bracket and ask yourself, would it cost more for businesses and individuals to mitigate the risks associated with it proactively, or wait until they become too serious to ignore?

Would the costs of, say, relocating petrochemical plants threatened by coastal flooding outweigh the risks of that same plant suffering catastrophic damage and potentially inflicting wider environmental harm? (We examined the potential costs and consequences of these so called “natural-technologic” catastrophes in the 2019 Verisk Perspectives report). Would the costs of capping abandoned oil and gas wells outweigh the harm that these “orphan wells” pose to human health and the environment? Would the cost of raising sea walls around vulnerable cities or building greater resilience into supply chains help offset the potentially crushing impacts of the climate crisis? 8, 9

One of the perennial goals for many in the insurance industry is to help foster greater resilience. As the issues that bubble to the top of the bracket challenge suggest, one route to this goal may be through a greater willingness to invest in mitigating longer-term risks. As Emerging Issues research indicates, there’s no shortage of them.

To learn more about some of the critical emerging risks facing insurers, visit the Emerging Issues website.


Andrew Blancher, CPCU

Andrew Blancher, CPCU, is director of commercial automobile product development and Emerging Issues at Verisk. You can contact him at Andrew.Blancher@verisk.com.


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  1. The Spars Pandemic 2025-2028: A Futuristic Scenario for Public Health Risk Communicators, The John Hopkins Center for Health Security, < https://jhsphcenterforhealthsecurity.s3.amazonaws.com/spars-pandemic-scenario.pdf >, accessed on April 28, 2022.
  2. Clade X, The John Hopkins Center for Health Security, November 16, 2017, < https://www.centerforhealthsecurity.org/our-work/events/2018_clade_x_exercise/media >, accessed on April 28, 2022.
  3. “Ever Given: Ship that blocked Suez Canal sets sail after deal signed,” BBC News, July 7, 2021, < https://www.bbc.com/news/world-middle-east-57746424 >, accessed on April 28, 2022. https://www.weforum.org/reports/building-resilience-supply-chains
  4. Supply Chain Security, U.S. Climate Resilience Toolkit, July 6, 20216, < https://toolkit.climate.gov/topics/supply-chain-security >, accessed on April 28, 2022.
  5. Rosemary Coates, “Global Supply Chains At Risk: Rare Earth Elements,” Supply Chain Management Review, June 20, 2019, < https://www.scmr.com/article/global_supply_chains_at_risk_rare_earth_elements >, accessed on April 28, 2022.
  6. Raudha Ben Amor, et. al., “The risk in Petroleum Supply Chain: A review and typology,” Supply Chain Risk Management, February 2018, < https://www.researchgate.net/publication/326201466_The_risk_in_Petroleum_Supply_Chain_A_review_and_typology >, accessed on April 28, 2022.
  7. Eustance Huang, “The chip industry is facing ‘major uncertainty’ as global tensions rise,” CNBC, August 29, 2019, < https://www.cnbc.com/2019/08/29/trade-tensions-global-risks-present-uncertainty-for-chips-sector.html >, accessed on April 28, 2022.
  8. Patricia Mazzei, “A 20-Foot Sea Wall? Miami Faces the Hard Choices of Climate Change,” New York Times, August 21, 2021, < https://www.nytimes.com/2021/06/02/us/miami-fl-seawall-hurricanes.html >, accessed on April 28, 2022.
  9. Jonathan Woetzel, et. al., “Could climate become the weak link in your supply chain?”, McKinsey Sustainability, August 6, 2020, < https://www.mckinsey.com/business-functions/sustainability/our-insights/could-climate-become-the-weak-link-in-your-supply-chain >, accessed on April 28, 2022.

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