Introduction:
Such
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 micrometre 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-
repellent 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.
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
Nano scale particles may include
the clean up 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
nanomaterial are produced,
stored, used and discarded.
What is nanotechnology?
The naive and direct answer to
the above question is to say that
Nanotechnology is a technology
concerning processes which are
relevant to physics, chemistry
and biology taking place at a
length scale of one divided by
100 million of a metre. Maybe a
little bit more enlightening
although equally naive is to say
that nanotechnology is the art of
producing little devices and
machines, somewhat at the
molecular scale. However the
scientific definition which may
be
slightly involved is to say that
nanotechnology is concerned
with the grey area between
classical mechanics and quantum
mechanics. Classical mechanics
is the mechanics governing the
motion
of all the objects we can see with
our naked eye.
Why is Nanotechnology
important?
Nanotechnology requires a
relatively small investment and
the way from research results to
marketing is relatively short.
Most companies in the US have
an R & D Department working
on Nanotechnology. In addition
there are a huge number of small
companies in Israel, the United
States, Europe, China and India
working on Nanotechnology
related products. In short, the
whole world considers
Nanotechnology to be the future.
Nanotechnology is important
because it is relatively cheap,
relatively safe, and relatively
clean and the financial rewards
are relatively very high. It is a
technology and science melange
oriented towards applications.
Nanotechnology touches or will
touch every aspect of our life.
For simplicity we will divide the
field into three major activities:
Nano material science, nano
electronics and nano
medicine. Needless to say they
all interact.
Overview of Nanotechnology:
Nanotechnology involves both:
1.The deliberate manipulation of
matter by certain chemical and/or
physical processes (referred to as
“bottom-up” production) to
create materials with specific
properties that are not displayed
in their larger forms.
2. The use of manufacturing
processes such as milling or
grinding (called “top-down”
production) to produce nan sized
particles. These particles may or
may not have properties different
from those of the bulk material
from which they are developed.
At the core of any process
involving nanotechnology is a
manometer (nm), which is one
billionth of a meter and 10,000
times smaller than anything that
the human eye can see. Although
the trend towards making things
smaller is nothing new, the
reduction of materials to the size
of nanometers results in both
new and altered properties. For
example,
some materials begin to exhibit
extraordinary electrical
conductance, resistance or new
magnetic properties. Some
become bactericides, and others
demonstrate exceptional strength
and water-repellency. Certain
nanomaterials can even interact
with biomolecules, which may
enable them to improve medical
diagnosis and tissue and organ
replacement.
These unique physical, chemical
and biological properties
generally exist for two reasons:
1. At the scale of nanometers,
particles and structures have a
very high surface-to-mass ratio.
This makes them highly reactive
compared to their bulk structure,
and this reactivity can be
channelled to produce superior
products.
2. Nanometers exist in the realm
of quantum physics, and
quantum properties are similarly
valuable in developing enhanced
materials.
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.
Likely Evolution of Insurance
Covers:
Nanotechnology risks are
covered under a wide variety of
insurance covers, including
product liability, workers
compensation, professional
liability and general liability.
Establishing direct relationships
and definitive conclusions
between exposure to
manufactured
nanoparticles and health and
environmental effects may take
years. In the meantime, it is too
soon to make broad and
sweeping decisions about
exclusions of nanotechnologies
from policy cover because:
> Exposure to the general public
is still low.
> The various nanotechnologies
encompass a broad array of
activities–without a uniform
description and with very
different risk characteristics.
> There is significant
diversification between the
various nanotechnologies within
most insurance portfolios, which
has the effect of alleviating
adverse selection among the
different nanotechnologies.
We at Guy Carpenter believe that
insurance coverage for
nanotechnology is likely to
evolve in a manner similar to
other changing technologies.
Initially, covers for the risk are
likely to mimic existing covers
for product liability. Over time,
the specific risks posed by
nanomaterials will be studied,
knowledge will grow and
customized covers will be
developed. We have observed
similar progress with other
evolving technologies. Going
back to the origins of modern
insurance, the first policies
written were for ocean marine,
reflecting the dominant
form of travel and commercial
transportation, which was by sea.
As transportation of goods
developed internally by canals
and roads, inland marine policies
evolved to reflect the newer and
different risks posed by inland
transportation. The final result is
a wide variety of covers
in the inland marine field, many
of which like “Accounts
Receivable” and “Electronic Data
Processing” have a tenuous
relationship to transportation by
water. We envision cover for
nanotechnology to evolve in
three stages.
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.
NANOTECHNOLOGY
SECTOR APPLICATIONS
Electronics
Displays; data memory; laser
diodes; fiber optics; optical
switches; filters; conductive and
antistatic coatings.
Energy
Lighting; fuel cells; solar cells;
batteries; Capacitors.
Engineering Construction

Protective coatings for tools and Materials; insulation; flame

machines; lubricant-free retardants; surface coatings;
bearings. mortar.

Environmental Automotive

Environmental monitoring; soil Lightweight construction;

and ground - water remediation;
toxic exposure sensors; fuel
changing catalysts; green
chemistry.
Food and Drink
Packaging; storage life sensors;
additives; juice clarifiers.
Medicine
catalysts and painting; tires;
sensors; windshield and body
coatings.
Chemical
Fillers for paints; composite
materials; impregnation of
papers; adhesives; magnetic
fluids.

Drug delivery systems; contrast

medium; rapid testing systems;
prostheses and implants;
antimicrobial agents; in-body
diagnostic systems.

Textiles

Surface coatings; “smart” clothes

(anti-wrinkle, stain resistant,
temperature controlled).