Nanotechnology: The Plastics of the 21 st Century??
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Harrison D. Oellrich Managing Director Worldwide Cyber Technology & Intellectual Property Practice Leader Nanotechnology: The Plastics of the 21 st Century?? November 14, 2006
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November 14, 2006. Nanotechnology: The Plastics of the 21 st Century??. Harrison D. Oellrich Managing Director Worldwide Cyber Technology & Intellectual Property Practice Leader. Agenda. Introduction to Nanotechnology What is nanotechnology? Significance Applications - PowerPoint PPT Presentation
Transcript of Nanotechnology: The Plastics of the 21 st Century??
Harrison D. OellrichManaging DirectorWorldwide Cyber Technology & Intellectual PropertyPractice Leader
Nanotechnology:The Plastics of the 21st Century??
November 14, 2006
Guy Carpenter 2
Agenda
Introduction to Nanotechnology
– What is nanotechnology?
– Significance
– Applications
The Associated Risks
– Occupational, environmental and consumer
– (Re)insurance concerns
The Actuaries Role
– What (re)insurers need to know
– How you can help your employers achieve their goals
Q & A
Guy Carpenter 3
An Answer To Many of Our Prayers?
U.N. World Resources 2000 report on the 50 year outlook:
– World population ↑ 50 %
– World economic activity ↑ 500 %
– Global energy and materials consumption ↑ 300 %
“(Nanotechnology) holds the answer to most of our pressing material needs in energy, health, communications, transportation, food, water, et cetera”– Richard Smalley, Professor Rice University, Nobel Laureate
Insurance = Enabler of technologies
The Potential:An Introduction to Nanotechnology
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What Is Nanotechnology?
The term ‘nanotechnology’ is derived from the Greek word ‘nanos’ or ‘dwarf’.– 1 millimeter = 1,000,000 nanometer
"Nanotechnology is the understanding and control of matter at dimensions of roughly 1 to 100 nanometers, where unique phenomena enable novel applications." – United State’s National Nanotechnology Initiative (NNI)
Guy Carpenter 6
Achieving Nanosized Particles
2 general processes– “Top-down”: Deliberate manipulation of
matter by certain chemical and/or physical processes to create materials with specific properties that are not displayed in their larger forms
– “Bottom up”: Use of manufacturing processes such as milling or grinding to produce nano sized particles
Nano-sized particles exhibit drastically different or superior properties
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The Science Behind the Marvel
As an object decreases in size, the ratio between surface area and volume increases.– Surface molecules are extremely reactive
Classical physics breaks down at 50nm– Objects take on different chemical, biological and
physical properties provoking altered optical, magnetic and electrical properties
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Four Promising Nano Materials
Buckyballs
– Molecules containing carbon atoms bound together in a hollow sphere
– Can enter cells as they pass easily through the blood stream
Nano particles
– Tiny particles consisting of a single element/compound
– Contain properties different from bulk material from which they were derived
Carbon Nano Tubes
– Carbon atoms bound in long thin tubes
– Enhanced conductivity / strength
Quantum Dots
– Nano sized crystals
– Emit light after light is shone on them
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Key Opportunities and Benefits of Nanotechnology
Economic– 15 % of all global manufacturing output in 2014.– Will add $1 trillion to the world economy by 2015 – Louise Valle, Chubb
Corp.
Manufacturing– Miniaturization, intrinsic production, reduction of waste materials
Environment– EPA: potential to reduce worldwide energy consumption by 14.6%– Can eliminate toxic waste at its source
Medicine – Poised to revolutionize the ways that we detect, prevent and treat various
diseases and medical conditions.
Research– 2005 NNI R&D spending already nearly $1.1 billion
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Irrational Exuberance??
Even if overstated all must agree that opportunities in this space are real and significant
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The Future Is......
Which products utilize nanotechnology?
– Some 200 consumer products presently on the market
YES
YES
YES YES
NOW!!!
The Risk:Understanding the exposures and risks from an (re)insurance perspective
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Risk Exposures
Occupational
– Source: Manufacturing, transportation, storage, use and discard of
particles
– Concern: Lack of protection, monitoring, filtration
– Coverage areas: Workers compensation
This is where the early health and safety concerns will arise:
– Researchers
– Scientists
– Other lab / production workers
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Risk Exposures
Environmental
– Source: Widespread applications → water basin, soil, air circulation
– Concern: Complete penetration, concern over new non-biodegradable
pollutants
– Coverage area: Environmental liability
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Risk Exposures
Consumer
– Source: Skin→ bloodstream, lung→ bloodstream, ingestion, drug
administration
– Concern: Penetration of brain membrane, disruption of immune system,
unintended flow of particles throughout body, etc..
– Coverage areas: Product liability
Guy Carpenter 16
Major (Re)insurance Concerns
Insufficient research, knowledge = major uncertainties
– No past data
– Unforeseeable future Unanticipated side effects The asbestos parallel Long tail, chronic concerns
– Cumulative loss nature
– Extremely broad spectrum of application
– Revolutionary rather than evolutionary
Guy Carpenter 17
(Re)insurance – Innovation Connection
Vehicle for bringing safe yet effective innovation to the marketplace
– A certain social responsibility involved
– Filters new risks and developments to general public Must stay cutting edge to protect customer
Enabler of technology
The Coverage:Helping Our Employers Achieve Their Goals
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What Do (Re)Insurers need to do?
Insurers
– Understand the technology and its processes
– Understand the risks
– Do the research into plausible and critical risks
– Begin to formulate products and coverage
Reinsurers
– Understand the technology and its processes
– Understand the risks
– Become comfortable with the industry
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Why Should The Insurance Industry Care?
A win–win scenario :
1) Insurance coverage allows evolution of the technology, all mankind benefits
2) Establishment of coverage products for nanotechnology, new portfolio of business generated
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Why General Exclusions Are Not The Answer
Nanotechnologies cover a very broad field with far from uniform risk characteristics.
Positive diversification effect for insurance portfolios based on variety and spread across industrial segments.
The exposure of the general population to nanotechnologies is still very low.
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Risk Awareness
Bring discussion to the front line between insurers and reinsurers
Help determine how underwriters and risk engineers should deal with critical issues
Consult underwriters on unavoidable uncertainties of risks
– No reliable probability curve
– No reliable severity estimates
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Risk Identification
Can we underwrite the risks?
Construct clear picture of risk landscape for clients
Develop and evolve contract wording
– Creation of new vocabulary and concise definitions
– Specify certain exposures
Facilitate research and risk awareness
– Aid primary in decisions
– Educate reinsurers
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Risk Management
It is everyone's responsibility to stay abreast of emerging exposures
– Wait and see attitude is strongly unadvised
– Close monitoring of risks
Actuaries can/should be an integral component of teams set up to study/monitor/guide their companies response to Nanotechnology (or any other emerging exposure).
THANK YOU!
QUESTIONS?
