Nanotech, genetically modified products, and gas fracking highlighted as key concerns


Nanotechnology and cyber risks are increasing concerns for the energy and chemical industry, according to BASF senior vice-president for corporate insurance Dr Eberhard M Faller.

He said the top risks centre around innovation, such as the use of nanomaterials, products with genetically modified origins and gas fracking production technology.

He said: “Are these risks insurable or non-insurable? The usual rule of thumb is the famous 80:20 rule. Roughly 80% of risks are not insurable and have to be borne by the profitability of the company and the risk capital provided by the shareholders. The remaining 20% may be transferred to the professional insurance market or kept by our captive insurer.”

Change of strategy

He added: “My new BASF insurance strategy for 2020 will be called ‘Going beyond’. We challenge ourselves to look at various dimensions beyond what we are doing today.

“We do not only focus on our own assets, but help customers to insure their assets or risks, working together with global insurance carriers. Or we look for new insurable risks, deploy insurance crossing the line of financial products. We strive for protection beyond today’s catastrophic cover market capacity.

“I would expect the DVS to support risk managers in two directions: providing a neutral market update of the industrial insurance business; and exploring our capability operating beyond today’s typical and classical scope of business and concept.”