In a new report, Munich Re describes Hyperloop technology – a rapid transport that moves passengers and goods in capsules – is both “feasible and insurable in the medium term”.
Developed by Hyperloop Transportation Technologies (HTT), Hyperloop functions as a transport method that uses low-pressure to propel capsules at high speeds using electromagnetic propulsion. The technology would allow travel of 600 kilometres (Los Angeles to San Francisco) in just thirty minutes.
The Hyperloop Transportation Technologies Risk Report, released on Tuesday, looked into the potential risks. It was compiled by HTT and Munich Re in an effort to see if the technology is viable and insurable.
The five key findings are as follows:
- “Bringing to fruition the Hyperloop proposition is one of the few genuine activities at the edge of human endeavour.” Although it is unproven in full-scale testing, the technology is “likely to be viable, and represents a realizable integrated system”;
- Hyperloop represents an insurable prospect that will embrace traditional risk transfer and yet-to-be-developed innovative responses to the HTT operating and capital model;
- The nature of the challenge is extreme and the global resources required to harness the Hyperloop ambition demand the HTT innovation implicit in the crowd-sourcing model. “Munich Re recognizes this as genuine innovation on a global scale,” that will likely be an essential component of future large-scale infrastructure projects. Traditional approaches to risk management will need to adapt to the technology;
- The technology will demand a “rigorous and structured” enterprise risk management (ERM) framework to ensure meaningful management against the reduction of the risk portfolio value that will change in the different stages of the project’s lifecycle; and
- The venture depends on funding as well as “developing and satisfying challenging regulatory environments and establishing and sustaining the perception and trust of society.”
Dirk Ahlborn, CEO and co-founder of HTT, suggested in a press release from Munich Re that “as we approach the commercialization of our technology, the creation of a new regulative framework is the biggest challenge. Being able to offer an insurable system is a huge milestone for this groundbreaking technology.”