Expert Risk Articles

Nanotechnology: No small matter

Global Risk DIALOGUE talked to Michael Bruch, a risk expert at the Allianz Center for Technology, about the risks and opportunities presented by these new technologies.

DIALOGUE: Mr Bruch, you recently represented Allianz at a major conference on nanotechnology. How far advanced is research in this area? A few years ago there was a lot of hype about nanotechnology, but recently things have been quiet on this front.

Michael Bruch: That's undoubtedly down to the fact that nanotechnology is an interdisciplinary technology and that means it has a very broad research base. Forecasts for the global market in nanotechnology range from $310 billion to 4 trillion by the year 2015. There hasn’t been much in the media about nanotechnology because the research requires a lot of funding in order to create specific nanoparticles for targeted applications on an industrial scale. The resources required are much greater than originally envisaged. Moreover, the projected revolutionary quantum leaps in the technology have not yet been achieved.

In what industries is nanotechnology already being used? For example, we know that carbon nanotubes are being used in the lithium-ion batteries used to power modern laptops and that hundreds of millions of euros are being pumped into nanoelectronics in Germany each year. Are politicians putting their emphasis in the right place?

This is certainly not the only area where nanotechnology is being used. This technology is helping to kill tumor cells in medicine. In the automotive sector, it's providing nonscratch paint. Protection against UV radiation in the cosmetics industry and self-cleaning textiles have also become a reality with nanotechnology. Government sponsorship for research and development is increasing, and global funding from public bodies currently amounts to some $4 billion annually. The United States, Japan, and the European Union are leading players, but markets such as Russia and South east Asia are gathering pace.

Research funding for more efficient energy technologies is a very good investment. A nanoenergy center is planned in Germany for 2012. This facility will combine research in nanotechnology and energy engineering.

World market forecasts for nanotechnology in dollars

What is your assessment of the political framework? Is there already a clear regulatory structure governing the use of nanotechnology? Is legislation already being put in place at an international or national level?

A change is taking place in national legislation. Up to now, existing laws have not been amended or supplemented with regulations specifically geared to nanotechnology. The new EU Cosmetics Directive specifies that nanoparticles in cosmetics will have to undergo safety tests starting in 2012. We're expecting similar trends in the food sector.

What steps is Allianz taking to keep up with the technology and remain in a position to assess the risks appropriately? How do you provide concrete support for your customers?

We have joined forces with our colleagues from the liability department and an external IT specialist to set up an Internet-based early warning system. This system enables us to collect, analyze and assess the literature on nanotechnology being published and subjected to peer review across the world. The information we collect will help us keep our colleagues in the AGCS risk consulting and underwriting departments regularly informed on the subject.

We like to give our customers support and advice if they have any questions on the safe handling or refinement of nanomaterials. With respect to risk assessment, nano-based raw materials are often only a small part of the overall product portfolio. A risk evaluation therefore commences with an assessment of the company’s management of risk and safety.

What is the quality of risk management in the company, and what concrete steps are taken to implement risk management in workplaces?

At the moment, there are no reasons to exclude specific areas of nanotechnology from insurance policies. This measure should only ever be adopted by an insurer as a last resort in order to protect the public, insured clients and the insurer from unacceptable risks.

You have joined forces with universities, research institutes and the private sector to work on the "NanoCare Project". What exactly is the aim of the project? You gave a presentation on the key results at the Environmental Forum in Berlin.

NanoCare is a project funded by the Federal Ministry for Research and Technology. A consortium involving industry (including BASF, Bayer, Evonik) and scientific research institutions is carrying out intensive research into potential health effects caused by nanoparticles. Toxicologic tests have been carried out on 11 nanoparticles at four selected workplaces. No detrimental effects from nanomaterials have been detected in employees. Nanomaterials do not cause any significant toxic reactions in lungs, and they are classified below the toxicity potential of the reference material "quartz dust."

The particles are inhaled by the lungs and removed from the lungs by phagocytes (as with other substances larger than nanoparticles). No penetration of the barrier to the lung’s blood was detected. The consortium then developed toxicological standard guidelines that will make future tests comparable internationally.

However, this does not conclusively mean that they are entirely safe. Moreover, materials of the same composition with a different size and structure can react in different ways. They therefore need to be tested individually. There still needs to be a thorough risk assessment encompassing everything from the raw material to the behavior of the nanoparticles in a final product.

What is your position on labeling obligations for products which contain nanomaterials?

It increases transparency. Purchasers can take a positive decision for or against a specific product. Informed consumers can already see that zinc oxide and titanium oxide in their sunscreen relates to nanoparticles. However, in the future the designation “nano” will have to be placed in parentheses after all these materials. A designation is only effective if positive attributes like say an "environmentally friendly" or "baby-safe" seal are identified or there is a warning notice like the symbols used for hazardous materials. As insurers, we welcome a debate about risks in conjunction with labeling.


The lotus effect caused by nanotechnological sealants and coatings makes surfaces water-repellent.

What does the future of nanotechnology look like?

No nanotechnology is without risks, and we will never be able to assess absolutely all the risks involved. It all depends on whether we arrive at a point where we understand the risks over the entire product life cycle of a nanoproduct, from its production to its applications and ultimate disposal, can assess them better and create risk transfer solutions.

Results from research projects such as NanoCare are hugely important. In ten years' time, the word "nanotechnology" will no longer be on everyone’s lips. We will encounter the concept in some form in virtually every product. When nanoparticles are integrated within a solid matrix, they are generally unproblematic. It's necessary to assess residual risks, have an open discussion about the risk-benefit profile and give a realistic assessment. This creates confidence in the technology – and that's the ultimate basis of acceptance.

Download "Global Risk Dialogue" fall 2009 (3 MB)