Years ago, it may have been hard to imagine a time when robots could have nine-to-five jobs and handle household chores, drivers could subscribe to luxury vehicle features like heated seats, and big infrastructure projects would become common across the country.

Remarkably, these aren’t future endeavors — they’re happening today. And they represent three emerging risks insurers should keep track of as they continue to develop.

The rise of robots raises myriad risks.

Robots have sparked the human imagination for well over a century, but the very first robots could arguably be traced back to 1500 B.C.E., when Egyptians constructed water clocks with human figurines to strike the hour bells. Humans have been devising ever more ambitious and creative ways to outsource their labor to machines ever since.

Commercial robots have been integrated into industries such as manufacturing, law enforcement, healthcare, warehouses, agriculture, automotive and more. Today, an estimated 3.4 million industrial robots are operating globally. By one account, sales of industrial robots reached an all-time high in 2021, with overall market penetration doubling in the past six years.

While robotic workers may help increase safety and productivity, they are not completely without risks. Potential issues include distraction to human workers, surgical errors, cyber data breaches and property damage from a robot in motion.

As the use of robots grows, the potential for robotic-related claims involving bodily injury, property damage and financial loss may rise as well, presenting insurers with the potentially thorny complexity of determining the cause of a robot-related accident.

Robotic concerns may also extend to homeowners insurers, as well. Today, consumers can buy a robot to vacuum or mop their floor, mow the lawn, clean a pool or wash out gutters. As home robots grow in sophistication and popularity, the proliferation of these devices may raise some concerns among homeowners insurers.

Researchers have demonstrated that some smaller household robots can be remotely commandeered and piloted around a home, snap photos or be loaded with malware. And if lithium-ion batteries power the robots, they could potentially pose a fire risk.

Will infrastructure spend lead to more shortages and inflation?

The recent manufacturing and re-shoring boom in the U.S., where companies are looking to bring supply chains closer to home, is creating potential opportunities for new business but also is raising concerns among some insurers about supply chain strains and inflationary pressures.

As part of the 2021 Bipartisan Infrastructure Act, the U.S. plans to invest $550 billion in a wide range of infrastructure projects — from reducing PFAS contamination in the nation’s drinking water to fortifying aging bridges, dams, ports and other structures against the ravages of age and the elements.

The benefits of these projects for insurers include potential new business opportunities in sectors such as transportation, manufacturing, energy, electric vehicle charging and construction. Meanwhile, infrastructure investments that enhance the country’s ability to mitigate, respond and rebuild following catastrophes (be they natural or cyber-related) may help reduce the severity of these events and minimize the downtime businesses and individuals experience as a result.

On the downside, as we learned during the pandemic, a boom in construction (in this case, residential) strained supply chains for materials such as lumber and drove reconstruction costs skyward. High demand may also generally lead to increased inflation in the impacted industries. Demand for construction workers, who are reportedly already in short supply, may further exceed supply, leading to possible delays in projects and property reconstruction after loss events.

Vehicle subscription features.

These days it may feel to some people that everything is a subscription-based service, so it’s perhaps no surprise to learn that even some automakers have begun putting several vehicle features, such as heated seats, behind a subscription paywall.

While the move may yield more revenue for automakers, vehicle subscriptions could complicate matters for insurers. Consider: Even if an owner doesn’t opt to pay for a given feature, the hardware will likely have to be included in the vehicle, which may increase the overall cost of new vehicles. This, in turn, could potentially lead to higher premiums and possibly increased costs for repairs (and thus insurance claims) for features that the owner may not use or even have had access to at the time of the accident.

While this may sound relatively innocuous for something like heated seats, it could cause potential issues for a subscription-based vehicle safety feature. Insurance companies may offer discounts for certain safety features that are either included or can be added on to vehicles at purchase. But what happens if some of these safety features are paywalled behind a subscription package that the insured either does not purchase or simply chooses not to renew during the policy period? Could this lead to an insured’s premium reflecting a safety feature in their vehicle that may not actually be active should there be a crash?

Subscription services may also provide a new outlet for hackers to exploit — the more software-enabled features, the wider the potential attack surface for cybercriminals.

Whether it’s robots handling household chores, luxury vehicle features or an influx of electric vehicle charging stations, our world is rapidly changing. How insurers price and manage risk must quickly change with it to keep pace.

*This article was originally published by Insurance Journal, CM’s sister publication