Technology is transforming the workplace, with everything from artiﬁcial intelligence (AI) to increased interconnectivity changing the way we work. But, while there are signiﬁcant beneﬁts to be gained, understanding how these advances aﬀect risk is essential.
The scale of the changes was highlighted in recent analysis by PwC. Its March 2017 UK Economic Outlook report estimated that up to 30 per cent of UK jobs are susceptible to automation such as AI and robotics by the early 2030s.
And, while it predicts that many jobs will change rather than disappear, sectors such as transport, manufacturing, and wholesale and retail are likely to be affected the most.
Even some of the more traditional sectors will be transformed. Take agriculture, where Simon Lusher, Head of Food & Agri at JLT Specialty, points to smart farming.
“Farmers are flying drones over their fields to capture data about the crops.
“This enables them to pinpoint water and fertiliser requirements, leading to higher yields of better quality crops,” he explains.
“Livestock farmers are also using microchips to collect more data on their animals. This helps them identify when an animal is ill and ensure treatment is delivered quickly, aiding recovery and preventing the disease from spreading.”
Similarly, in the construction sector, Building Information Modelling (BIM) is bringing major changes.
“BIM helps to identify the pinch points in a construction programme, which will have time and cost advantages,” explains Dave Cahill, Senior Partner at JLT Specialty.
He also flags up the increased use of offsite prefabrication and modularisation, which is increasingly common in the UK construction market. Again, this offers a faster, safer and cheaper way to build.
Technology shift affects risk
But, while technology offers benefits, it also affects risk. A good example is the shift to autonomous vehicles.
These are already being used in closed environments, for instance to move iron ore in some of Rio Tinto’s mines in Australia, and are expected to become commonplace in the future.
Lusher explains: “Autonomous vehicles are safer and reduce the risk of accidents but there is also the potential for a hacker to take control and cause considerable damage.”
Increasing reliance on technology brings a number of challenges; this has been seen at engineering firm Costain, where technology is increasingly used to capture data on infrastructure projects.
“Technology has brought us much closer to the nation’s infrastructure, enabling us to identify problems and intervene much quicker,” says Peter Slater, Aerial Solutions UAV Manager at Costain.
“But, for it to be economical, you have to fully trust the technology to give you the right answer.”
Technology also introduces issues around liability, especially as it takes over roles previously undertaken by an employee.
If something goes wrong, there are question marks over who would be responsible, with the manufacturer potentially in the firing line.
Liability issues also arise where technology facilitates a more collaborative approach, as is the case with BIM in the construction sector.
“Future evolutions of BIM will allow project team members to work on a live model,” says Cahill.
“This raises issues around liability, in the event of a fault being introduced to a model, and also around intellectual property. These issues will need to be addressed in contract terms and conditions.”
Overhauling operational systems to take advantage of new technologies brings risk, too.
Tech implementation risk
As well as having to determine what will bring the biggest benefit to the business, Slater says there can be significant issues with implementation.
“You can find that, when you scale up, it no longer works as expected. As a result, we encourage all technology ideas to be uploaded so they can be filtered before more cost is incurred.”
His firm also has a number of governance routes in place to ensure the safety and business benefits of any new technology.
These are rigorous and incorporate any industry-related safety requirements to reduce the risk. “We also speak to our brokers,” adds Slater. “It’s important to factor the insurance angle into our decisions when considering new technologies.”
This reliance on insurance means insurers and their products must also adapt to suit these new technologies.
Cahill says that cover is constantly evolving to fit changes in the market. “There are new risks for insurers to consider,” he says.
“But, even with something as complex as shared liability, if it’s possible to manage contractually, the risk can be covered by insurance.”
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