The world is riskier for two major reasons:

• Natural disasters are trending up.
• Emerging risks add to the previous portfolio of risk.

There is empirical evidence that windstorms in particular are ator near record levels.

It started six years ago with Hurricane Katrina and continuedthis spring with a large volume of tornadoes in the U.S. and thetsunami in Japan. Fortunately for the global insurance market, onlya relatively small portion of the tsunami was reinsured.

The use of the Internet and general increase in technology hasincreased risk; the cyber risks we see today were virtuallynonexistent 10 years ago.

Recently we have seen hackers shut down various online services,and identity theft is on the rise, thanks to the bad guys' use oftechnology.

The good news is that risk-management tools have been enhancedto address greater risk. 

Also, the insurance market has provided substantial surpluscapital to handle recent catastrophic property losses generallywithout significant premium increases.   

Given this increase in risk, it is no coincidence that many newinsurance products have been developed in the past 10 years. Rightabout the year 2000 employment-practices liability developed into aviable product with substantial coverage at a reasonable premium.In a similar timeframe, stand-alone pollution-liability policiesbecame viable with good, affordable coverage.

On the plus side, pollution risk is one area that appears to bemuch more manageable today than it was over 20 years ago when therewere Superfund losses and litigation was necessary to determinewhether coverage was available within general-liabilitypolicies.

And increased risk does create opportunities. The role of therisk manager has grown—whether it is an expansion intoenterprise-risk management or an expansion of insurable risks.Insurers and other risk-management service providers have a greaterrole today.