> Many scientists view nanotechnology as the revolutionary technology of the 21st century. Just as plastics were a pervasive and revolutionary product of the 20th century, nanotechnology products are expected to have widespread use and change our lives in myriad ways. Nanotechnology products are currently in use in more than 200 consumer products,ranging from air conditioners to sunscreen.
> Nanotechnology is based on matter that is so small that it exists in the atomic and molecular realm. At this size, the substance's physical, chemical and biological properties frequently are different from what they were at the micrometer and larger scales. By harnessing these new properties, researchers have found that they can develop materials, devices and systems that are superior to those in use today.
> As with practically all scientific breakthroughs, nanotechnology carries both risks and rewards. While it appears almost certain that the rewards will greatly outweigh the risks, attention must be paid to possible dangers to the well-being of humans from this new technology.
> The insurance industry has a major role to play in helping society capture the benefits of nanotechnology by helping to spread the risks.
> Nanotechnology risks are covered under a wide variety of covers, including products liability, workers compensation, professional liability and general liability.
> Insurance cover for nanotechnology products are expected to evolve in three stages:
1. An early study period, currently underway, where insurers and reinsurers study the issue.
2. The fear phase, frequently accentuated by unfounded but terrifying rumors. This stage is expected to be short, given the generally benign nature of nanotechnology products.
3. The mature phase, where cover routinely is provided either within conventional products or on a standalone basis.
> Government regulation of nanotechnology is in its infancy. Existing regulations in Europe or the United States generally do not distinguish between bulk and nanoscale size. In particular, detection tools for the routine checking of toxins are not adequate to address the smallness of nano-sized matter.
> There is a great opportunity now for insurers to work with governments to shape a regulatory environment that will foster the positive use of nanotechnology while sensibly addressing the risks.
> Nanotechnology carries a great promise for improved economic and social well-being. Given sensible management of the risk by governments and the insurance industry, this new scientific advancement can add greatly to the progress of humanity.
Introduction
Nanotechnology is a generic term for applications that work with matter that is so small that it exists in the atomic and molecular realm. At this size, the substance's physical, chemical and biological properties are different from what they were at the micrometer and larger scales. By harnessing these new properties, researchers have found that they can develop materials, devices and systems that are superior to those in use today. From the way we communicate, to the methods used to diagnose and treat our illnesses, to the speed with which our computers process data, this new technology promises to enhance our lives in almost limitless ways.
Nanotechnology currently is being used to improve existing products and processes, for example, by strengthening the material used in golf clubs and bicycle frames, creating stain- and water-repellant clothing and producing wear-resistant paints and coatings. One developing area in nanotechnology is that of self-assembly, whereby materials will be able to grow themselves. Such innovations will not only increase productivity, but also will create new materials in a process known as "dynamic self-assembly."
In the longer term, however, nanotechnology is likely to result in completely revolutionary advances. Promising uses of nanoscale particles may include the cleanup of heavily polluted sites, more effective diagnosis and treatment of cancer and other diseases, lighting that is twice as energy-efficient as what is currently available, cleaner manufacturing techniques and much smaller and more powerful computers. Research indicates that nanotechnology even may help create an alternative fuel to power our automobiles. As optimistic as researchers may be, however, responsible decisions must be made regarding its development and use. Growing evidence suggests that nanoparticles-the basic building blocks of nanotechnology and the tiniest materials ever engineered and produced-may pose environmental, health and safety risks.
Consequently, if the insurance industry is to support the myriad positive uses of nanotechnology while not incurring major long-term losses, it must have a thorough understanding of how nanomaterials are produced, stored, used and discarded.
Nanomaterials
The nanomaterials field includes subfields which develop or study materials having unique properties arising from their nanoscale dimensions.[15]
Interface and colloid science has given rise to many materials which may be useful in nanotechnology, such as carbon nanotubes and other fullerenes, and various nanoparticles and nanorods. Nanomaterials with fast ion transport are related also to nanoionics and nanoelectronics.
Nanoscale materials can also be used for bulk applications; most present commercial applications of nanotechnology are of this flavor.
Progress has been made in using these materials for medical applications; see Nanomedicine.
Nanoscale materials are sometimes used in solar cells which combats the cost of traditional Silicon solar cells
Development of applications incorporating semiconductor nanoparticles to be used in the next generation of products, such as display technology, lighting, solar cells and biological imaging.
The Relationship Between Insurance and Innovation
Risk is a major barrier to innovation. Taking a risk, however, is almost always the first step in any type of progress. The productivity of the global economy depends on companies that are willing to find new and better ways of doing things despite the potential perils involved. If they start to be ruled by fear of liability, our global development could be in jeopardy.
By helping businesses manage the risks associated with product development, insurers play an important role in stimulating innovation and helping our world move forward in positive ways. From the early days of marine exploration, to the first satellite launch, to the development of cutting-edge technologies, insurers have provided a critical safety net that has supported and encouraged the creative process. Given the revolutionary potential of nanotechnology and its expected use in virtually every industry, it is incumbent upon insurers to help accelerate its benefits. At the same time, developing a thorough understanding of the risks involved is critical.
Benefits to Global Economy
This push to extend the boundaries of science comes just in time. According to estimates by the United Nations World Resources 2000 report, our world population will expand by 50 percent in the next 50 years, world economic activity will grow by 500 percent and use of global energy and materials will increase by 300 percent. The ramifications of these numbers are staggering,
and the development of new ways to respond to burgeoning demands is critical.
Nanotechnology-driven processes are spreading rapidly, with positive uses that may be virtually limitless. Current and longer-term benefits are likely to be realized in several key areas.
Manufacturing
The benefits of nanotechnology to manufacturing are, and likely will continue to be, considerable. As noted earlier, the process of breaking material down into nanoparticles allows it to be rebuilt atom by atom, in order to create products with superior strength, decreased weight and size and impervious coatings.
Nanotechnology also will extend miniaturization to a level that few of us could have imagined. From the size of computer chips, to the space required for the design and manufacture of products, we will need to redefine our notion of "small." An auxiliary benefit is that nanotechnology-driven manufacturing will not produce the same types or amounts of waste as did previous production methods. For example, fewer raw materials are required, which means less need to use up natural resources. This increased consumption also may mean decreased waste. In addition, processes likely will become less labor-intensive since, once a molecular manufacturing process is in place, fewer people will be needed to make it run.
Environment
Nanotechnology-based processes promise higher agricultural yields, diminished pollution, renewable energy sources and less expensive water filtration systems.
The U.S. Environmental Protection Agency reports in its draft white paper on this subject that nanotechnology could reduce worldwide energy consumption by as much as 14.6 percent, which will decrease carbon emissions and save billions of dollars per year. Nanotechnology also has the potential to control pollution through "source reduction." This is a method of eliminating toxic waste at its source, with the understanding that releasing the waste into the environment is the last resort. Source reduction can be achieved by cleaning up
existing processes or by reducing consumption of resources where such consumption creates pollution. There are several examples of how nanotechnologies can help our environment.
Contaminant Detection
One nanotechnology-based application expected to be introduced in the near term is enhancedsensors for detecting biological and chemical contaminants. These sensors will be able to identify harmful agents at very low environmental concentrations, reducing measuring costs and improving specificity.
Waste Site Remediation and Treatment
Zero-valent iron has been used successfully to treat contaminants in groundwater by forming a permeable reactive wall. Nanoscale iron particles also may be used to counteract dense nonaqueous phase liquid (DNAPL) contaminants found in aquifers, which can substantially reduce the cost of environmental cleanups Other nanomaterials also show promise in breaking down trichloroethylene, tetrachloroethylene and carbon tetrachloride, all serious contaminants.
Reduction of Global Energy Demands
Nanotechnology can contribute to reduced energy demands by creating lighter materials for transportation vehicles, enabling the reflectivity of roofing material and improving the use of alternative energy technologies such as solar energy. It also can allow the molecular-level control of industrial catalysis, improve the production of hydrogen by solar power and reduce electrical transmission line losses. As previously noted, given these benefits, the annual reduction in U.S. energy consumption could reach nearly 15 percent. Although it is a long way from commercialization, the development of an alternative fuel source is a potential application of nanotechnology that is becoming more critical each day. Research is being conducted to determine the effectiveness of carbon nanotubes to store hydrogen, which could lead to a fuel that powers not only cars but also laptop computers, cellular phones, digital cameras and various other electronic devices.
Medicines
Some of the most promising findings have been in the area of health and medicine, where nanotechnology is expected to revolutionize the ways that we detect, prevent and treat various diseases and medical conditions.
The National Institutes of Health has funded research in such areas as the development of a nanotechnology-based targeted delivery system for anti-cancer drugs, creation of a nano-fiber technology for blood vessel replacements and the design of a method to control delivery of medication to treat drug and alcohol addictions. These and other studies show that, because nanoparticles are so much smaller than human cells, they can function within cells to detect diseases in their very early stages and administer treatment right to the source.
Information Technology
Nanotechnology also offers tremendous benefits to the computer industry. Many major companies are working with nanoparticles to create significantly smaller storage devices than those currently available, as well as processors that will run many times faster than those on the market without any additional power consumption.
Associated Risks
Although there are now only a limited number of products in the marketplace that contain engineered nanomaterials, the pace of nanotechnology development virtually assures that this will not be the case for too long. Consequently, the government, insurers and other key industryparticipants-both in the United States and abroad-are concerned about the associated environmental, health and safety impact. These interested parties are working together to develop a better understanding of nanomaterial's properties and risks.
Attribute-Related Concerns
The following attributes of nanoparticles create a number of unknown exposures:
> Size of particles: The size of nanoparticles makes them incapable of being measured using normal techniques.
> Increased reactivity and conductivity: Nanoparticles are more reactive and conductive than particles larger in size. As such, materials that have been benign in the past may become toxic in nanoparticle form.
> Routes of exposure: Because of their size, nanoparticles can be inhaled or ingested and may even enter the body through the skin. In addition, they are capable of crossing the blood-brain barrier, which protects the brain against contamination.
Types of Exposures
Health
To predict the health risks associated with nanomaterials, we must know the facts, such as routes of exposure, the number of particles actually absorbed, movement of materials once they enter the body and their impact on the body's regulatory system. Adequate information is not yet available in these areas to determine with any certainty whether, or how, nanotechnology can affect our health. Research has suggested, however, that nanoparticles may be able to enter the body through routes impenetrable by larger particles and then possibly gain entry into the circulatory system. Studies in rats also have shown that ultrafine particles smaller than 100 nanometers are more capable than larger particles of the same substance of causing lung inflammation and tumors. In addition, there are concerns that nanoparticles may interfere with the body's biological processes and potentially affect the immune system.
Nevertheless, many more studies need to be completed before any health risks associated with nanotechnology are more than just a matter of speculation.
Safety
Very little is known about the safety risks presented by engineered nanomaterials. Given their unique properties, particularly their increased reactivity and electrical conductivity, safety concerns are focusing on whether nanomaterials could cause fires or explosions.
Environmental
Because nanoparticles behave differently from larger particles, questions have arisen about whether they can pollute the water supply or damage crops during processes that release these particles into the air, soil or water. Again, studies in this area are in their infancy.
Populations Affected
In the short term, the major health and safety risks will be to researchers in laboratories and production staff exposed during the manufacturing of nanomaterials. People in these occupations must be aware of the potential hazards of using materials that have unknown properties, and they must take measures to mitigate their risks. However, their activities are contained and
generally do not pose a threat to the public or to the environment.
Regulation
Regulators in the United States, the European Union and elsewhere around the world believe that nanoparticles represent an entirely new risk and that it is necessary to carry out an extensive analysis of the risk. Such studies then can form the basis for government and international regulations. Existing regulations may prove to be grossly inadequate in providing a safe environment in a world of nanotechnology products. Studies of the impact of airborne particles generally have shown that the smaller the particles, the more toxic they become. This is due in part to the fact that, given the same mass per volume, the dose in terms of particle numbers increases as particle size decreases. As a result, standards developed for mass products may prove to be highly insufficient for nano products. In general, it is to be hoped that regulation of nanotechnology will be conducted in a comprehensive fashion, taking account of the specific manufacturing and use environments of these new products. It is likely that the silo form of substance regulation in place for mass products may not be appropriate for products of nano size, where a high degree of reactivity tends to change the level of risk across different environments.
Conclusion
As is the case with most emerging areas of risk, nanotechnology challenges us with many unknowns. These challenges are further complicated by the fact that few risk-related forecasts have been scientifically confirmed. Many industries are extremely optimistic about the opportunities associated with nanotechnology. If they are not currently exploring its potential, they are likely to do so in the very near future. Because insurers play such a critical part in enabling new and beneficial technologies, it is critical that they work together with manufacturers, the government, scientists and regulatory agencies to identify and quantify nanotechnology's risks. Public response to this new technology, as well as the legal climate, will depend upon how much accurate information is available. We at Guy Carpenter believe that managing the unknowns associated with the development and use of nanotechnology will not be much different from gauging the risks involved with environmental liability (EL) or employee practices liability (EPL). Standard, affordable coverage will
eventually be available. In the meantime, by using claims-made forms and setting appropriate deductibles and limits that are commensurate with unknown risks, insurers can mitigate their potential losses and still participate in this exciting new market.
Selected References
Allianz Group. 2005. "Small Sizes That Matter: Opportunities and Risks of Nanotechnologies."
Allianz AG: Munich. mall, A.H. 2003. "Future Technologies".
Heijkants, Ralf G. J. C. "Nanotechnology Delivers Microcoatings".
Mahalik, Nitaigour Premchand, ed. Micromanufacturing and Nanotechnology.
Kubik T, Bogunia-Kubik K, Sugisaka M. (2005). "Nanotechnology on duty in medical applications" .
Das S, Gates AJ, Abdu HA, Rose GS, Picconatto CA, Ellenbogen JC. (2007). "Designs for Ultra-Tiny, Special-Purpose Nanoelectronic Circuits".
