A few months back while I was flying all across the country from Hawaii to Wichita to Atlanta giving presentations on nanotechnology, genomics and robotics to a variety of different industry associations, I had the opportunity to read Peter Bernstein’s best-selling book, Against the Gods: The Remarkable Story of Risk.
Although it was written in 1996, I highly recommend it for anyone seriously interested in contemplating the future. This is because—for better or worse—the future will largely be determined by the insurance industry’s ability to understand—and thus underwrite—the future of various technologies.
For example, while I am personally optimistic about nanotechnology’s ability to create everything from scratch-resistant car panels to tailor-made drug delivery vehicles capable of killing cancer cells at an early stage, these products will not be commercially mass-produced until the insurance industry understands the environmental and health-related risks associated with new nanomaterials and nanoparticles.
Similarly, RFID (radio frequency identification) technology and nanosensors have the ability to create a host of wonderful applications. But until the insurance industry can adequately assess the potential dangers of how prolonged exposure to wireless technologies might impact people, the RFID industry could advance at a much slower pace than many people (including industry experts) expect.
The same is true for the rapidly emerging fields of synthetic biology and robotics. I have written before about the amazing potential of each to transform the energy, agriculture and automotive industries, but these things won’t happen until regulators and insurance professionals are comfortable insuring these technologies. For instance, while Craig Venter (a leader in the field of synthetic biology) is quick to dismiss the potential of some new artificial life form or “designer bacteria” escaping from his laboratory and wreaking havoc on an unsuspecting public, I’m not as confident the insurance industry will be as quick to dismiss the risk.
Regarding robotics, while it is easy to forecast that robotics will grow into a $50 billion industry within the decade—as Bill Gates has done—the figure could drop to a fraction of that amount if an iRobot PackBot goes haywire over in Iraq and inadvertently kills six soldiers or if a self-driven robotic car created by General Motors or Ford runs over a pedestrian.
Such events often cast a new—and less flattering—light on a promising new technology and can bring the industry (and its future hopes) into the cross-sights of the legal profession. As a historical example, recall that at the beginning of the 20th century asbestos was hailed as a wonder material for its amazing insulating and fire-retardancy properties. Today, we hold a decidedly different—and less positive—view of asbestos.
It is not my contention that the insurance industry will slow down all emerging technologies. In fact, in some instances, just the opposite might occur—the industry might facilitate the adoption of certain new technological advances.
For example, in spite of genomics incredible potential to violently disrupt the insurance industry’s business model of pooling risk, it is possible the insurance industry will facilitate the adoption of genetic testing by mandating that patients for certain diseases be genetically tested prior to the administration of any new drug in order to make sure that that drug will work effectively on the patient.
The same holds true for RFID technology. It could soon be determined that the cost of embedding sensors and RFID chips into bridges, cars, buildings and a host of other products greatly enhances safety and performance. If so, regulation could work in favor to these technologies by getting them mandated for certain applications.
If it seems as though I am speaking out of both sides of my both (i.e. that the insurance industry might either hamper or help RFID and other technologies) that is because I am. As F. Scott Fitzgerald once said, “The test of a first-rate mind is the ability to hold two diametrically opposed ideas in your head at the same time.”
It is a concept that all people interested in the future should adopt because professionals in the insurance industry are schooled in this very idea and they calculate not just the benefits of future technologies but also its potential risks and costs. And where the industry comes out in these calculations will, to a large degree, determine which technologies shape our future.
