Insurers scrutinize nanotechnology trated by a recent report by the National Research Council, is that risk of nanotechnology is poorly understood and risk research is grossly underfunded. And insurance companies agree. Lloyd’s (U.K.), the world’s oldest insurance firm and one of the largALEX PARLINI, PROJECT ON EMERGING NANOTECHNOLOGIES
On September 24, 2008, the U.S. insurance company Continental Western Group (CWG) issued a statement noting that it would exclude nanotubes and nanotechnology from its coverage. The statement has since disappeared from the CWG website, and fears of similar decisions by other insurance companies are as yet unrealized. But although CWG’s decision to exclude nanotechnology was criticized by many as hasty and ill-informed, experts note that it represents the increasing concern among insurers about the emerging risks of nanotechnology. “Nanotechnology is a big problem because the technology is moving much faster, as we all know, than information on health and environmental safety,” says Robert Blaunstein of Nanotechnology Risk Management, a firm that advises industries, insurers, and investors on how to best manage the risks of nanotechnology. The technology has already revolutionized electronicssour computers, iPods, and cell phones all contain nanomaterials. Physicians and pharmaceutical companies are using nanotechnology to devise smarter ways to deliver drugs. From sunscreens and bedsheets to socks and swimsuits, manufacturers are using nanomaterials in myriad products. As of August 21, 2008, 803 products already on the market claimed to contain nanomaterials, according to the Woodrow Wilson International Center for Scholars’ Project on Emerging Nanotechnologies (PEN), a nonpartisan group. However, how the different kinds of nanomaterials will accumulate in the environment, and what impacts they will have on humans and wildlife, remain largely unknown. Despite several studies suggesting potential harm from some materials, the general consensus, as illus-
Carbon nanotubes have been shown to have asbestos-like impacts on mice.
est companies, along with other influential insurance companies, has listed nanotechnology at the top of its “emerging risks” list. “The biggest challenge facing insurers may be the diverse nature of nanotechnology and the lack of information regarding its impact to health and the environment,” wrote David Baxter, in an article in the February 2008 newsletter of SafeNano Initiative, an undertaking by the U.K.’s Institute of Occupational Medicine, which helps researchers and industries quantify and control the risks of the technology. Baxter is the lead researcher on the Exposure Management Team of Lloyd’s. “Generally speaking, the role of [the] insurance industry is always enabling risk taking,” says Thomas Epprecht, an expert on emerg-
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ing risks in risk engineering services at Swiss Re, one of the world’s largest reinsurance companies. “Because risk is our business, nanotechnology is up front ... subject to risk consideration.” Reinsurance companies insure insurance companies and often cover risks no one else wants to handle. As early as 2002, Munich Re, the world’s largest reinsurance company, released a report stating that it expects a “new dimension in claims for personal injury, material damage, and financial loss, as well as liability risks in product, environment, and public liability.” Swiss Re itself released a report on nanotechnology in 2004 and has since organized conferences as venues for manufacturers, insurance companies, scientists, nonprofit organizations, and government agencies to talk about and understand the potential risks of nanotechnology. Insurers rely on hard data and calculable risks to provide coverage to companies and individuals. “If I was insuring you for death, [with] life insurance, I know lots of statistics, lots of numbers [that estimate] when I or you or anyone might pass away,” explains Blaunstein, who has spent many years in the insurance industry. “It’s easy for me to get a really good idea when that might happen, so I can judge what the premium might be.” This is why insurance companies are always on the lookout for data on hazards. “If there is any speck of data, they’ll go after it,” explains David Rejeski, director of PEN. With little data on potential hazards of various nanomaterials in their myriad uses, insurers find it difficult to assess risk while insuring either manufacturers or specific products that are made with nanomaterials. From their standpoint, a variety of coverage areas could potentially be affected by this uncertainty, including environmental liability, workers’
10.1021/es900041e
2009 American Chemical Society
Published on Web 01/21/2009
compensation, and product liability, says Blaunstein. Still, to issue blanket exclusions, as CWG did briefly, “would not be our approach,” notes Epprecht. Blaunstein and Rejeski agree that excluding nanotechnology and all nanomaterials is not the smartest thing to do from a business standpoint. Swiss Re and Lloyd’s are both recommending a precautionary approach to manufacturers and insurers. Insurers can advise their clients to adopt existing frameworks for safe nanotech-
nology, like the Nano Risk Framework produced by DuPont and the Environmental Defense Fund. This framework has guidelines for industries for gathering meaningful data on nanomaterials to understand the materials’ properties, intrinsic hazards, and possible exposures. They also recommend that insurers provide coverage for short periods so as to avoid latent claimssthat is, claims filed as a result of problems due to long-term exposure to toxic chemicals like asbestos.
Nanotechnology is an “enabling technology,” Blaunstein points out. For the most part, it will improve products, which means better business for insurers, he says. “If [insurers] learn more about it, learn more on how to manage it, I think clearly they would be in a better position to provide insurance,” he adds. And that is already happening, he says. Insurers are already carefully watching nanotechnology. —RHITU CHATTERJEE
March 1, 2009 / ENVIRONMENTAL SCIENCE & TECHNOLOGY 9 1241
