Insuring the Unknown

(NHI Nanoblog) People in the risk management business (not to mention Donald Rumsfeld) are famous for talking about the “unknown unknowns.” With nanotechnology, there are a lot of them—a fact that’s got insurance companies as eager as researchers and regulators to find out what potential dangerous lurk amid some of the economy’s most promising new technolgies.

A briefing prepared late last year for a branch of the CRO Forum, a risk-management consortium made up of European insurance companies, echoes the themes that run through efforts to isolate and understand dangers that might lurk inside products that use nanomaterials. The briefing has a number of great charts, including a visual representation of the nanoscale and a helpful characterization of what constitutes “active” and “passive” nano-based stuff.

But the most interesting part is the briefing’s blunt assessment that insurers are already assuming risks associated with nanotechnology, through products currently on the market or in development. That fact, the report says, makes a rapid increase in the understanding of nano risks critical.

Nanotechnology involves making medicines and consumer products from the super-properties of super-small particles. As the CRO report notes, it’s already in lots of items, from tennis rackets to sunscreens. But the very property that makes these products useful—their tiny size—might also make them dangerous, both in the short- and long-term.

Even as the nanotechnology field surges, the seriousness of the associated risks remain unclear. That’s what has insurers concerned.

“For insurers, nanotechnology remains largely beyond the bounds of prevailing actuarial calculations and underwriting standards,” the CRO briefing says. “Yet every day, knowingly or unknowingly, insurers assume risks associated with nanotechnology and extend a considerable amount of capital in terms of policy limits, defense obligations and/or other commitments.” 

The report says that more information is needed about what the risks are, how to measure them, and how to control them. What’s especially important is a candid view of what happens to nanomaterials over a long period of time, which researchers call the life cycle.

In other words, is a substance safe in its first incarnation, but problematic when it’s thrown away or otherwise deconstructed? And what are the long-term effects of exposure to any of these materials?

“From the insurer’s perspective, negative effects that manifest themselves quickly can be identified and contained before they escalate into widespread harm and major losses,” the briefing says. “Determining whether a nanomaterial holds some latent hazard that may have a significant but delayed impact is a much more difficult task and a key concern for insurers.”

Assuaging the qualms of insurers is important, especially if the effort to broaden the commercial applications involving nanotechnology is to succeed. While insurers are highlighting the same issues that researchers are working on, nobody in the scientific field thinks the definitive answers to these questions are going to emerge anytime soon.

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