Poised to become the new standard for cellular mobile communications, 5G—or fifth generation—technology promises nearly instantaneous wireless connectivity, vastly improved data transmission capacity and a potential boon for a wide range of internet of things devices.
According to Swiss Re Institute’s recent SONAR report on emerging risk trends, however, the new technology may also introduce risks that could significantly impact the insurance industry. For example, cyber exposures will be dramatically increased as hackers will be able to exploit device vulnerabilities more easily and launch attacks more quickly and at greater volume, making them harder to defend against. Magnified privacy and information security threats could lead to increased litigation risks, while international disputes over implementation could increase the potential for espionage and sabotage via security “backdoors” and ultimately impact financial markets. Also, because additional antennas and cell towers are necessary for functional 5G network coverage and capacity, there may be an increased possibility of negative health effects from exposure to higher levels of electromagnetic radiation, leading to more long-tail liability claims.