I read with interest Mark Breading’s take on geographic information systems technologies and their potential impact on the insurance industry. I don’t disagree with Mark’s assertions that there are a host of opportunities available to those insurers that decide to add an enterprise location strategy to augment their core business strategies.

But for every technology innovation, it seems that the “human factor” can introduce a dark side, which, in this case, may override the benefits of what GIS and GPS technologies have to offer.

Futurism.com notes that, in an interview earlier this year with Axios, Microsoft’s founder Bill Gates shared his concerns about the potential negative impact technology advances could have on our society at large. “There’s always the question how much technology is empowering a small group of people to cause damage,” Gates said.

At the 2011 Women in Insurance Leadership conference in Baltimore, I made a wrong turn and ended up in the back of a large room filled with North American military leaders, who were discussing the vulnerabilities faced by the United States and its satellite systems due to cybercrime. Back then, as in recent news reports, their concern centered around Russians using satellite signals tied to GPS systems to attempt to penetrate and hack our power grid.

From an insurance risk management perspective, the cause isn't as impoertant, whether cybercrime or human error. Rather, it’s the effect that matter. So, on the surface, enterprise location technologies don’t appear to foretell catastrophe, right? Paul Tullis of Bloomberg might disagree. Tullis recounts the tale of Duke Buckner, a marketing and business development executive for Microsemi Corp., which provides semiconductor and systems solutions for aerospace/defense, communications, data centers and industrial markets. One of those products includes timing/synchronization technologies, and one morning in early 2016, Buckner realized that something had gone very wrong with his product.

Tullis described the root cause: A bug in the GPS network, the result of the U.S. Air Force, which operates 31 satellites, decommissioning an older one, zeroing out its database values and accidentally introducing tiny errors into the database, skewing the numbers. By the time Buckner got wind of the error, several satellites were transmitting bad timing data, running slow by 13.7 millionths of a second.

“GPS isn’t just for maps,” Tullis reports. “It’s also a kind of vast, spaceborne clock. Computers all over the Earth use it to determine what time it is, down to billionths of a second. When there’s the slightest disagreement among those computers, things fall apart.”

The result was that over the next 11 hours, cellphone towers lost their connections, U.S. policy and fire stations reported communications errors, BBC radio signals were interrupted and the telescope that tracks asteroids in Earth’s orbit went offline, notes the article.

Of course, commercial lines’ actuaries and risk assessment professionals try to tackle every possible “what if” scenario—including what the costs are of a catastrophe related to GPS, GIS systems. But this can become a bit like playing craps in Vegas --- even against the science, it’s almost impossible to even establish odds. For insurers, this means commercial lines policies must take into consideration the potential results of the worst possible scenario in any given application. Whether cybercrime or human error, when GIS/GPS systems are down, it has the potential to affect the banking and financial industries, ATM networks, telecommunications, emergency response, electric utilities, cloud computing, air and vehicle transportation, media broadcasting and even the military. Business interruption is the least of it.

Although the US military is taking additional steps to thwart GPS hacking, it’s a constant threat, notes Tullis, most notably GPS spoofing, which relies on malicious software to communicate fake signals to fool the receiver, say an aircraft or self-driving vehicle, to think it’s somewhere it isn’t. The risk management challenges seem overwhelming.

Today, there are an estimated 2 billion GPS/GIS receivers sending and receiving signals around the world, and according to The European Global Navigation Satellite Systems Agency, by 2022, that number will reach 7 billion. The European Union, Russia and China are the only countries in the world that claim to have a fully functioning back-up system.

So, for all the GPS and GIS systems’ advances, insurers will continue to be forced to play the ultimate game of “cat and mouse” when it comes to risk management efforts.

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