INSIGHT ON

                             Zurich and nano     02
                             Kings of
                             small things        08
                             How big are
                             the risks?          10
                             The enormous
                             potential of nano   04
JuNE 2009

            At the leading edge
            Zurich’s thought leadership
            on nanotechnology

            No small thing
            The enormous potential of nano

            The kings of small things
            The regulatory environment for
            nanotechnology development

            Large risks from small things?
            Myth and reality of nano-risks
                                                                               Jonathan Tin

                                                                               Eric Johnson, Biljana Kostic,
                                                                               Ashutosh Riswadkar, Katja Trodella

                                                                               Copyright held by Zurich Financial
                                                                               Services Ltd on all text, photographs
                                                                               and illustrations unless otherwise

                                                                               dEsIgn And pRodUCTIon
                                                                               Addison Corporate Marketing

This issue of Industry Insight is focused on nanotechnology – the
manipulation of atoms and molecules for the creation of new structures
at the scale of billionths of a meter.

As you will see throughout this issue, innovation in nanotechnology is
largely driven by the pursuit of nanoparticles which have entirely different
properties from their macro-scale counterparts – say, silver versus
nanosilver. Occasionally this transformation also implies a transformation
in the risk landscape. Zurich’s activities in nanotechnology are dedicated
to helping our customers understand how this transformation could
affect them, and how they can meet the challenges that may arise.

In the opening article we describe the origins of Zurich’s dealings with
nanotechnology, and the steps we’re taking today to remain a thought
leader in this important field. In the feature article we describe the vast
potential still to be realized in nanotechnology, across a broad range
of endeavors and industries such as health care, computing, building           gUEsT EdIToR
                                                                               Steve Knutson
materials and more. The next article gives an overview of the changing         Director, Emerging Issues
state of regulation, and the last teases out the real versus imagined risks
posed by the technology’s further development.

Thanks for reading. Feel free to contact me with any questions or
comments on

Steve Knutson
Director, Emerging Issues
Zurich in North America

                                                             Zurich is dedicated to helping
                                                   “         customers meet the risk challenges
                                                             associated with nanotechnology.

                                                                                                      INDuSTRY INSIGHT   01
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               ThE lEAdIng
               Zurich in front on nanotechnology

                         ack in 2006, members of           counterparts. So when Steve Knutson           Meanwhile nanotechnology left the lab
                         Zurich’s global Emerging Risks    (Director of Emerging Issues, Zurich          some time ago. You’ll find nanoparticles
                         Group (ERG) met once again to     Group ERG member, and Guest Editor            in cosmetics, sporting goods, and in
                         ask themselves the same           of this issue) brought up nanotechnology,     many other sections of your local
               question they’d been asking for years:      an issue he’d been studying since 2003.       department store (see page 4). Yet for
               of all risks on the horizon, which had      The question was not simply whether           nano-visionaries, the promise of
               the greatest potential to affect Zurich’s   nanotechnology was a breakthrough             nanotechnology remains largely ahead
               business, and the businesses of its         development – this much was never in          of us: think of bacteria that can gobble
               customers? Which risks could truly be       doubt – but did it pass all three tests of    up oil spills, or building materials that are
               called ‘emerging’?                          emerging risk?                                lighter, stronger, and more resilient, and
                                                                                                         you start to get a sense of how broad
               The question isn’t always easy to answer.   Check, check, and check.                      the horizons might be.
               To the ERG, an emerging risk must meet
               three standards. First, it must be a        Nanotechnology was precisely the sort         So in 2006, what did all this mean to the
               phenomenon whose nature and effects         of development for which the ERG had          ERG? And what did it mean for a global
               are unknown – so for example, an            been started in the first place. “From the    insurer – one with thousands of
               imminent outbreak of cholera couldn’t       very start,” says Knutson, “there wasn’t      customers working across a range of
               really be considered an ‘emerging’ risk,    much disagreement. It was clear that          industries, many of whom were already
               no matter how threatening it appeared.      nanotechnology had incredible potential       major investors and innovators in
               Second, an emerging risk must go            to change a whole range of industries. It     nanotechnology?
               beyond the bounds of existing               was also clear that its risk profile might
               underwriting and risk management best       be totally unique.”                           First and foremost, it meant that this
               practices – so that even a rise in the                                                    emerging risk presented a clear
               incidence of cyber thefts and security      Materials in the nano state do not            opportunity for Zurich. Zurich needed
               breaches would fall short, since the        always have the same properties they          to work with its customers in
               exposures by themselves are known           have in the macro state. Indeed, this is at   understanding their nano-scale risks,
               !risks with existing underwriting and       the heart of what makes nanoparticles         and also on behalf of those same
               risk management practices designed          so promising (and why, for example,           customers, by staying on top of both
               to address them. Finally, an emerging       it suddenly makes sense to put silver in      scientific the regulatory developments
               risk must go beyond existing actuarial      your sweatsocks). By the same token,          surrounding nanotechnology.
               calculations – so that even if everyone     the risk profile could be totally new.
               switched over to electric cars, it would    Indeed, our understanding of the              Zurich seized the opportunity on three
               only matter to the ERG to the degree        toxicology of nanoparticles is being          fronts. First, Zurich made sure that
               that those cars had a different actuarial   refined every day.                            insurers had a voice in the development
               profile than their combustion-driven                                                      of industry’s health, safety and

    02      INDuSTRY INSIGHT
                                                    Zurich is the go-to choice for any
                                            “       corporation looking to exploit the
                                                    enormous potential of nanotechnology.


environmental standards and nomen-          understand the nano-risk exposures of        in a way that made a good fit for us.”
clature. They found it on the American      its customers, and it would also provide     Intertox Chief Executive Officer
National Standards Institute’s (ANSI)       a way to form a high-level view of the       Richard Pleus echoes the sentiment:
accredited u.S. Technical Advisory          risks that could be associated with          “The collaboration is complementary.
Group (TAG) to ISO/TC 229 on Nano-          nanotechnology generally. By working         As toxicologists, we have expertise on
technologies, where today Ashutosh          closely with corporate customers,            nanotechnology’s potential impact
‘Rish’ Riswadkar, Liability Line of         collecting data on the specific nano -       on human health. Zurich provides the
Business Director at Zurich North           particles they were using, learning about    insurance viewpoint. Working together
America, serves as the lone member          the specific applications where they’re      on ZNEP™ has clearly positioned Zurich
from the insurance industry. ANSI, which    employed, and then categorizing and          as a leader in nanotechnology within
regularly brings together government,       combining this information, Zurich           the insurance industry.”
academic, and industry representatives,     could form a global overview of nano-
develops recommendations for nanotech       technology and its various facets of risk.   The timing is right, as innovations in
standards which it passes along to the      Such an activity would not only be a         nanotechnology are occurring almost
International Standards Organization        good way to protect its business, but it     daily. While pure nanoparticle plays are
(ISO) – an important step in creating a     could form a basis for providing risk        rare – say, boutique operations
standards infrastructure for                management advice to its customers           developing their own nanoparticles,
nanotechnology development.                 going forward.                               then selling them to the highest bidder
                                                                                         – big corporations are devoting sizeable
Second, Zurich sought to have its voice     Today that vision has come to life with      resources to developing applications that
heard in the ongoing regulatory debate      the Zurich Nanotechnology Exposure           can invigorate existing product lines in a
(see page 8). “We want a regulatory         Protocol™, or ZNEP™.                         gold rush of nano-innovation.
regime that’s practical and effective,”
says Knutson, “A clear and consistent       The road to ZNEP™ has not followed a         Zurich works closely with many of those
set of parameters could go a long way       straight line. In the early stages, Zurich   corporations today, trying to understand
in supporting a safe and innovative         looked to partner with academic              the nanoparticles they’re developing,
nanotechnology industry.” Today Zurich      institutions to develop the ZNEP™            and using the ZNEP™ tool to structure
keeps close watch on regulatory             application. Knutson and others met          that knowledge-building process.
proposals around the world, and seeks       with leading university departments and      Through this approach, the lag between
to inform the debate wherever a risk        researchers around the world, yet            discovery and insurability can be
management perspective seems needed.        something never quite clicked. Finally       shortened dramatically – making Zurich
                                            they came around to Intertox, a              the go-to choice for any corporation
Finally, Zurich struck out to develop a     health-based research and consulting         looking to exploit the enormous
risk assessment protocol of its own. Such   firm in Seattle (uSA). “In the end,” says    potential of nanotechnology.
a protocol would help Zurich better         Knutson, “Intertox was business-minded

                                                                                                                     INDuSTRY INSIGHT   03
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               no smAll ThIng
                                                                                                          friction, and they may acquire
                                                                                                          superpowers such as invisibility or
                                                                                                          extraordinary strength. Remember zinc
                                                                                                          oxide, the white goo that lifeguards rub
               The enormous market potential of nanotechnology                                            on their noses to protect against
                                                                                                          sunburn? When produced as very fine

                                                                                                          nanoparticles, it becomes transparent,
                         o doubt about it,                  No doubt about it, nanomaterials will         and hence much more attractive to most
                         nanomaterials are exciting. In     become ever larger in the marketplace.        sunbathers. When in your ordinary
                         the super-small world of tiny      For the most part, they are the latest        pencil, carbon (in the form of graphite)
                         particles, common substances       advance in an age-old progression of          is soft and malleable. Yet at nanoscale,
               can take on extraordinary characteristics.   new materials. Just as bronze, iron, steel,   carbon can become far harder and
               Solids can pass through solids, visible      concrete and plastics did in their day,       stronger than steel.
               things turn invisible, soft substances       nanomaterials are already advancing
               become super-hard, electrical insulators     from miraculous developments into             And then there is silver. The same
               transform into conductors and metal          regular features of everyday life. What at    glistening metal used for centuries in
               can be burned as fuel.                       first raises eyebrows eventually shrugs       jewelry, coins and tableware, when
                                                            shoulders, and in getting there, will also    reduced to grains less than 100
               No doubt about it, nanomaterials are         fatten some wallets.                          nanometers across, turns into a
               mundane. Their largest-volume products                                                     disinfectant!
               have been around for years and now           lET’s gET smAll
               are mature (see sidebar: Old versus new      Begin with one of the strangest truths        smAll sTUFF FIghTIng ThE swEAT
               nanotech). Even new products mostly go       about material properties: size matters.      Like much of nanotechnology, such
               into conventional applications such as       If broken down to the nano-scale,             extraordinary properties are being put to
               cars, clothes, computers and cosmetics.      substances can behave very differently        use in ordinary applications. Nanosilver,
               Recent breakthroughs involve tennis          than they do in their normal state.           as it is called, has been built not only
               rackets, washing machines and – get                                                        into odor-resistant socks, but over 200
               ready for it – socks that repel odors from   Out on their own, nanoparticles can           other products. These range from
               smelly feet.                                 start acting like comic book heroes. They     toothpastes, pet shampoos, fabric
                                                            break free from the forces of gravity and     softeners, bath towels, medicines,

    04      INDuSTRY INSIGHT
cosmetics, deodorizers, and baby             Pearl effect pigments – the wonderful         to conductivity (e.g. conductive inks
clothes, to nanosilver-lined baby bottles,   world of color has expanded with the          that allow circuits to be printed onto a
refrigerators, food containers and           introduction of these extra glossy, super     surface). Researchers are even exploring
kitchen cutting boards. On top of that       shiny pigments. Natural mica, ground          the use of nanogold to combat cancer.
are silver-enhanced electric shavers,        to nanoscale and coated with metal
curling irons, ankle braces, wrist bands,    oxides adds luster to paints, as well as      Nanotubes – made from carbon (the
women’s brassieres and handrails for         cosmetics such as lipstick, nail polish       same stuff of pencils and diamonds),
buses.                                       and blush. For longer-lived applications,     nanotubes look like drinking straws –
                                             nanomica also protects against weather        only shrunk to a ten-millionth of normal
The extraordinary-into-ordinary              and wear.                                     scale. They are unusually strong and
pattern also fits the other major,                                                         conductive, and can lend these
new applications of nanomaterials:           Metals – while tiny particles of elemental    properties to a host plastic when mixed
                                             metals have long been used in catalysis       in even at tiny doses. This is potentially
Silica sols and metal oxides – gel-like      (chemicals, refining and automotive           useful for lots of products, though
suspensions of silicon dioxide (so-called    exhausts), new production methods             perhaps easiest to visualize when
colloids) have been used for years in        allow nanoparticles to be created at          thinking about products such as sporting
paper-making, silicon-chip polishing and     specified sizes and special distributions.    goods – tennis racquets, for

a variety of other industrial processes.     This can be tricky, because with a few        instance – that need to be
Thanks to manufacturing advances,            exceptions, metal nanopowders ignite          lightweight yet strong.
producers have more recently been able       when exposed to air. Applications range
to make them as either gels or powders,      from catalysis to disinfection (nanosilver)
out of other metals (not just silicon, but
also aluminum, titanium and others) and
to control more closely the size and
                                                        Just as bronze and iron did in their
distribution of nanoparticles. These sols
are used mainly in protective coatings
for electronic and construction
components. Perhaps the best-known
applications are in sunscreens and in
                                             “          day, nanomaterials are advancing from
                                                        miraculous developments to
                                                        regular features of everyday life.
coatings for artificial joints.

                                                                                                                 “     INDuSTRY INSIGHT   05
               A related product, the so-called                       unfolded throughout the sci-fi canon,                  million) by 2015 1. Some market analysts
JuNE 2009

               ‘Buckyball,’ is a molecule of 60 carbon                including from such authors as Stanislaw               have doubled or even tripled that figure,
               atoms that looks like a miniature soccer               Lem (The Invincible) and Frank Herbert                 while others come several orders of
               ball – one that has a tantalizingly long               (The Green Brain).                                     magnitude lower. They disagree partly
               list of unique properties. Yet despite this                                                                   because market data are imprecise, but
               promise, despite the fact that Buckyballs              Here again, however, commercial fact                   mainly because some analysts count
               sparked public fancy for nanotech, and                 is more mundane. Nanodevices’ main                     the value of the entire nano-enhanced
               despite the fact that they even helped                 applications are in computers. While                   product (say, the lipstick) while other
               earn their inventors a Nobel Prize in                  these may be science-fiction staples                   count only the nanomaterial therein
               chemistry. . . they have yet to find                   (and, in a sense, computers have taken                 (say, the nanomica).
               significant commercial applications.                   over the world), cramming more circuits
                                                                      on a chip or more memory on a drive is                 Still, this could be an instance where size
               So what about nanodevices? After all,                  hardly the stuff of literature. And surely             doesn’t matter so much, at least not if
               putting tiny machines to work has been                 that is how producers like it – a nice                 you’re trying to figure out whether
               a long-standing fantasy of science fiction             earner, sans drama.                                    nanotechnology represents a significant
               – for better and for worse. In the 1966                                                                       growth opportunity. On this point,
               film ‘The Fantastic Voyage,’ for example,              bIg monEy                                              analysts are pretty much all in
               miniaturized tools (and people!) save                  So how big is the market for nano-                     agreement that, regardless of the
               a dying man. In ‘Prey,’ a 2003 book by                 materials? The estimates can vary                      baseline, growth is and will be robust,
               Michael Creighton, some much more                      dramatically. In 2001 the u.S. National                typically on the order of 10-25 percent
               sinister nanobots (tiny robots) try to                 Science Foundation predicted global                    per annum – and that’s no small change.
               take over the world. Similar plots have                revenues of uSD 1 trillion (a million

                 AboVE    1 The mundane applications of truly wondrous things:   2 Old-fashioned nanotech: carbon black has a long      3 Making materials lightweight, yet strong: sporting
                            nanotechnology is hard at work making what was         history of keeping tires familiarly black.             goods are a natural market for nano.
                            once visible invisible (as in sunscreens).

    06      INDuSTRY INSIGHT
         Corporations have gotten the message,
         and are voting with their wallets,                        whERE ThE RUbbER mEETs ThE RoAd:
         investing heavily in new capacity and                     old VERsUs nEw nAnoTECh
         looking across their business to see
         where nanotechnology can make a                           While popular excitement about them dates      agglomerated into particles often larger
         significant difference to their bottom                    back maybe a decade, nanomaterials             than 100 nm; and performance is less
         line. Indeed, just thinking of the impact                 themselves have been around far, far           linked to individual particle size than to
                                                                   longer. Nature creates them (e.g. ocean        surface area.
         that nanotechnology could have at the                     spray, soot or volcanic ash), and so does
         level of a company’s infrastructure –                     conventional manufacturing. According to       By contrast the next generation of
         faster computing, say, or more powerful                   market analyst SRI Consulting 2, the two       nanomaterials is likely to be discovered
         batteries – suggests that this could be                   biggest commercial products are: silica gels   through a focused pursuit of highly-
                                                                   (the little sachets of desiccant often found   engineered, purpose-specific particles,
         a real game-changer for a lot of                          in pillbottles, shoeboxes, or accompanying     which their owners hope to patent for
         companies. For this reason, production                    some other product that must be kept dry);     exclusive use, and thereby edge out
         of – and most likely, profit from –                       and carbon black, a refinery byproduct used    the competition.
         nanomaterials is poised to grow rapidly                   in tires to make them look, well, black.
         for the foreseeable future.                                                                              Compare this with good old carbon
                                                                   Although revenues for these ‘old’              black – the ubiquitous and widespread
                                                                   nanomaterials roughly equal those from         descendent of lampblack, which has been
                                                                   ‘new’ nanomaterials, the former’s growth is    in production for more than three thousand
                                                                   far lower and their nanostructures are less    years – and you’ll agree that nanotechnology
                                                                   critical to performance. As SRI Consulting     ain’t what it used to be.
         1   explains, ‘old’ nanomaterials are

                                                                           •	 Getty Images
                                                                      1                                           3 4

                                                                              2                                    •	 Computer wafer, close-up (full frame)

4 Nanotechnology can make a big contribution to
  making your computer smaller and faster while
  boosting memory at the same time.

                                                                                                                                                    INDuSTRY INSIGHT   07
               KIngs oF
                                                                                                        Cosmetic Products and Non-Food
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                                                                                                        Products (SCCPNFP) classify titanium
                                                                                                        dioxide – a filler used in products as

               smAll ThIngs
                                                                                                        diverse as paint and toothpaste – as safe,
                                                                                                        without regard to its particle size.
                                                                                                        Titanium dioxide as a nanopowder (used
                                                                                                        in sunscreens) is regulated no differently
               Regulating nanomaterials                                                                 than it is as a macromaterial. This means
                                                                                                        that costly and time-consuming testing
                                                                                                        and approval of the nanosubstance is

                                                                                                        avoided, because it rides through
                      IFRA REACH TSCA, FDA CPSC           are recognized, the regulatory                permitting on the shoulders of its
                      EPA, DG ENV OSHA… Is this all       environment will continue to be               larger-sized cousin (which, in chemical
                      part of a code, a strange           reformed. For many governments, the           terms, is admittedly the same material).
                      language or some strange genetic    aim is to apply existing regulatory
               sequence? None of the above, actually:     frameworks, as much as possible, to the       Increasingly, environmental scientists are
               these are initials for regulations and     emerging realm of nanomaterials.              questioning this piggyback approach.
               regulators. All of them and more are                                                     They note that nano and macro particles
               being mobilized to protect the public      sEpARATE bUT EqUAl                            of a given substance may have very
               from the dangers potentially represented   It could be argued that most                  different properties. As a group of nano
               by nanotechnology.                         nanomaterials already are regulated,          scientists pointed out in a 2008 issue
                                                          except that they aren’t. Nearly all current   of Nature 1: “…nanomaterials, some
               Clearly, innovators in nanotechnology      rules for how substances must be              of which have novel properties, are
               will confront a patchwork quilt of         produced, used or disposed of apply           capable of being incorporated in highly
               rules and rulers. Almost certainly this    simply to materials, with no distinction      diverse products, may be transported
               patchwork will create gaps and overlaps,   between a material in its normal, macro       to places in new ways, and may be
               turf battles and orphaned dossiers,        form (the usual object of regulation),        designed to be persistent. Too little is
               disagreements and occasional confusion.    and the same material in nano form.           known to predict the environmental
               Yet as numerous observers will point                                                     fate of nanomaterials, and feasible
               out, most existing materials are           For instance, the u.S. Food and Drug          documentation of environmental
               controlled in a similar hodgepodge         Administration (FDA) and the European         dispersion through monitoring is not
               fashion, and as the gaps and overlaps      union’s (Eu) Scientific Committee on          expected in the short term.”

    08      INDuSTRY INSIGHT
Governments’ responses to this message
have been mixed. On one hand they
have no desire to tarnish their ongoing
subsidy and promotion of nanotech,
which has been hailed as an economic
booster and job creator. On the other
hand, they recognize that a nasty
‘incident’ could spoil the nano-
technology party. Fear among the
general public – whether or not it is
shared by business people or scientists
– could torpedo the nano industry
before it fully leaves port.

As they so often do, governments have
responded with a compromise. Two
additional acronymed groups – the u.S.’s
National Nanotechnology Initiative (NNI)
and the Eu’s Research Directorate (DG
RES)– have been tasked with planning
and coordination of nanomaterials
regulation. This comes alongside their       Above Macro and nano versions may need to be regulated seperately
existing job of promoting nanotech
research, development and
commercialization (and yes, some
scientists have noticed this apparent        development of common standards                 or Publifocus in which scientists, officials
conflict of interest).                       (see page 2).                                   and the general public air their nano
                                                                                             hopes and fears. Germany’s federal
The challenge boils down to recognizing      until those are agreed, the second              government has even sponsored a
the importance of understanding              priority, controlling nanomaterials, will       ‘Nanotruck,’ an 18-wheeled science
nanoscale risk, while still encouraging      be a special challenge. So far, regulators      museum cum propaganda ministry that
the emergence of ground-breaking             are approaching nanomaterials in a way          has been touring the country this year to
nanotechnology applications. In this,        that’s similar to how they approach             praise the wonders of these small things.
Zurich is leading its industry by example,   conventional materials: by their life-cycle
developing a body of knowledge of            stage and by their sector of application.       If all this sounds somewhat disjointed,
nanoparticle toxicity that can inform the    For the case of, say, titanium dioxide in       that’s because it is. Still, the overall
risk management solutions it offers to       sunscreen, regulators might control its         understanding is steadily coalescing
innovating customers (see page 2).           production through workplace safety             among governments that they must
                                             and industrial pollution laws, its use          keep nanomaterials growing and
R Is FoR REgUlATIon                          through consumer product rules, and its         profitable, but also safe.
Regulators take their mandate as a           disposal through water quality statutes.
combination of three assignments: risk       It might also be regulated (perhaps
                                                                                             1 Hanson et al. Late lessons from early warnings for
research, making and enforcing rules,        concurrently) through sector-specific             nanotechnology. Nature Nanotechnology 3(8), 444–447
and stakeholder consultation.                legislation for cosmetics or chemicals.           (2008).

Job one is to find out better how            Adding to this complexity is the myriad
nanomaterials come in contact with           of agencies that enforce the rules,
people and the environment, and what         often independently. In the u.S., for               soVEREIgns oF nAno
happens when they do. Current funding        instance, the federally run Environmental
for this, says a mid-2008 report by the      Protection Agency (EPA) has begun                   European Union
Project on Emerging Nanotechnologies,        to issue rules about handling of and                •	 REACH – Regulation for Registration,
                                                                                                    Evaluation and Authorisation and
amounts to less than 5 percent of            exposure to nanoforms of alumina,                      Restriction of Chemical Substances
nanoscience research subsidies. Future,      silica and silver, while a state agency,            •	 DG ENV – Directorate General for
increased money and attention are to         the California Department of Toxic                     the Environment
be focused on two areas: 1) toxicology       Substances, is considering controls                 •	 SCCPNFP – Scientific Committee on
                                                                                                    Cosmetic Products and Non-Food
of nanomaterials, and 2) standards for       on carbon nanotubes. Likewise, the
                                                                                                    Products intended for Consumers
measuring said toxicology and other          competencies of the Eu and its member
properties. Nanotechnology is still new      states are still being delineated, thus             United states
enough that researchers have yet to          likely to be patchy and at times                    •	 FIFRA – Federal Insecticide, Fungicide
define uniform protocols and standards       overlapping.                                           and Rodenticide Act
                                                                                                 •	 TSCA – Toxic Substances and Control Act
for how it should be characterized. Even                                                         •	 CPSC – Consumer Product Safety Council
the definition of nanotechnology itself      The final piece of regulation’s puzzle              •	 EPA – Environmental Protection Agency
is non-standardized. Recognizing the         is a post-modern add-on: ‘stakeholder               •	 FDA – Food and Drug Administration
critical importance of filling these gaps,   consultation.’ u.S. and Eu ‘nanotech                •	 OSHA – Occupational Safety and
                                                                                                    Health Administration
Zurich is working closely with groups        action plans’ call for various talking
that have been charged with the              shops with names such as PubliForum

                                                                                                                                 INDuSTRY INSIGHT    09
JuNE 2009

               lARgE RIsKs
               smAll ThIngs?
               Real and imagined risks of nanotech

                                hen an aerosol-propelled   Surely one of the victims thought so,        practices that can help customers
                                sealant called ‘Magic      telling the Los Angeles Times 1 that she     confront this uncertainty with greater
                                Nano’ debuted in           “put the blame on nanotechnology.”           confidence (see page 2).
                                Germany in 2006,           And her charge might have attracted
               consumers were ‘enchanted’ in a way         more serious attention, but for one          AnoThER AsbEsTos?
               the manufacturer had never intended.        inconvenient truth: the product              The hazards of nanotechnology should
               More than one hundred users reported        contained no nanoparticles whatsoever!       not be trivialized. Common sense
               that using the product had a range of                                                    suggests that materials with
               unpleasant side effects – from nausea,      Subsequent investigation by Germany’s        extraordinary properties might also
               to dizziness, to coughing and other         Federal Institute of Risk Assessment 2       have extraordinary potential as poisons
               respiratory difficulties. The product was   showed ‘Magic Nano’ to be a complete         or pollutants.
               soon brought to the attention of local      misnomer; instead, the probable culprit
               health authorities.                         was an anti-corrosion additive in the        As Andrew Maynard of The Project on
                                                           product’s formula.                           Emerging Nanotechnologies, a non-
               Customers were warned off the product,                                                   profit, independent research consortium
               ‘Magic Nano’ was pulled from shelves,       This ‘nano case that wasn’t’ highlights      funded by two u.S. charities, explained
               and the afflicted, including the 30 or so   the peculiar risk position of                to Technology Review 3: “We know
               who had to be hospitalized after using      nanomaterials. Public concerns can be        from animal studies that very, very fine
               the product, soon recovered. Yet to an      overwrought, and long-term health and        particles, particles with high surface
               alarmed public, the case of ‘Magic Nano’    environmental data will take time to         area, lead to a greater inflammatory
               raised a larger question: should products   accumulate. Recognizing the need and         response than the same amount of
               containing nanomaterials be regulated       opportunity to close this gap with           larger particles. We also know that they
               more closely to prevent similar accidents   empirically-based risk insights, Zurich is   can enter the lining of the lungs and get
               from happening?                             stepping forward by building a body of       through to the blood and enter other
                                                           knowledge and risk management                organs. There is some evidence that

    10      INDuSTRY INSIGHT
                                                                      How risky are nanomaterials? Nobody
                                                           “          really knows. For most substances,
                                                                      not enough toxicity data are available
                                                                      to make conclusive bans or permits.


nanoparticles can move into the brain        as pesticides and to ban any that had      and greedy, while the latter brands
along the olfactory nerve, so this is        not been registered.                       the former as Luddite obstructionists.
completely circumventing the blood-                                                     unfortunately the public is generally
brain barrier.”                              While not completely dismissing this       uninformed about nanotechnology,
                                             concern, some producers of products        or at least confused about it.
Tiny particles can pose a threat to nature   that employ nanosilver contend that this
as well. Maynard’s colleague, Samuel         is an expensive overreaction. George       upon hearing the term nanotechnology,
Luoma, points out 4 that nanosilver – a      Maass, a chemist with Colloidal Science    many would first think of nanobots,
nanoparticle increasingly used to kill       Laboratories, argues that nanosilver,      which could be understandably terrifying
germs, and which in its macro-state is       when emitted to soil or water in the       – assuming, of course, they actually
seen as a potential environmental hazard     environment, quickly agglomerates into     existed (see sidebar).
– could also kill aquatic life when          larger particles that are harmless 5. He
released to wastewater.                      and representatives of other nanosilver    down, boy, down
                                             makers contend that the skeptics are       How risky are nanomaterials? Maynard,
FEAR And loAThIng                            overly fearful, making mountains of        Luoma and others say the real crux of
This sort of talk inflames nanoskeptic       molehills. Says a spokesman of the         the problem is that nobody can really
activists such as the International Center   industry group NanoBusiness Alliance:      say for sure.
for Technology Assessment, or the            “To date, there have been no reported
Action Group on Erosion, Technology          problems associated with any products      “Would we know if nanomaterials were
and Concentration (ETC). Citing their        using nanotechnology 6.”                   causing harm?” asks John Lawton,
potential toxicity, the former group in                                                 chairman of the uK’s Royal Commission
the spring of 2008 petitioned the u.S.       This makes for a deep-seated conflict.     on Environmental Pollution 7. “The
Environmental Protection Agency (EPA)        At the extremes, where the debate has      answer is, no we wouldn’t.

to force all products containing             tended to be the loudest, the anti-nano    We have no evidence that they
nanosilver to be tested and registered       crowd labels the pro-nanos as reckless     cause harm, but a lot of that is

                                                                                                                    INDuSTRY INSIGHT   11
               because of a lack of evidence.” For most
JuNE 2009

               substances, many conclude that not
               enough toxicity data are available to
               make conclusive bans or permits.

               So scientists are calling for more
               research to fill the gap. Corporations and
               governments are both supportive of the
               idea as well. Indeed, in February 2009
               the u.S. Congress approved a National
               Nanotechnology Initiative (NNI) that,
               among other things, will boost funding
               of risk-related research (see page 8).
               Similar programs are going forward
               across the developed world.

               As a leader in risk management, Zurich
               is also heeding the call. The insurer has
               piloted and now begun implementation
               of a software product that helps identify
               risks regarding nanoparticles. The Zurich
               Nanotechnology Exposure Protocol™,
               or ZNEP™, translates the latest nano-
               technology research into risk assessment
               and risk management for Zurich                                Above It may take a lot of data to know the full risk potential of a given nanoparticle
               customers (see page 2).

               Regardless of such proactive measures
               by industry, caution will often rule the
               day. Already, the u.S. EPA has taken the
               nanosilver petition seriously. Registration
               of some products is now mandatory.                                nAnoboTs RUlE … noT
               Law firm Gibson Dunn & Crutcher 8
               expects in 2009 increased “federal                                True, some British newspapers and scientists     later picked up by Michael Creighton in
                                                                                 dismissed Prince Charles as an ignorant          the novel Prey, Drexler imagined a swarm
               efforts to control nanosilver products.”                          technophobe when, in May 2003, the heir          of nanobots that would spread like locusts,
               This, they contend, will be the thin end                          to the throne warned, as one report put it,      cutting a swathe of destruction, turning
               of a wedge; controls will in time branch                          “that swarms of rogue ‘nanomachines’             “the biosphere to dust in a matter of days.”
               out to other nanomaterials. On this front                         could one day reduce all in their path to
               Zurich is stepping forward as well,                               ‘gray goo.’” London’s Sunday Times 9             Impossible? Not necessarily. Nanobots
                                                                                 headlines ran “Charles Gets in a Wee Tizz        have an extremely successful role model,
               offering its expertise to regulatory                              over Nanotechnology”.                            commonly known as life. Living cells are
               debates and standards-setting processes                                                                            essentially nanobots. They replicate all the
               (see page 2).                                                     But to be fair to the crown prince, he did       time, and sure enough, life has indeed
                                                                                 not start the specter of ‘gray goo’. It was      taken over the world.
                                                                                 first publicized in the 1980s by a respected
               In order to promote public safety                                 scientist, Eric Drexler, who since founded       Before you run for cover, take heart that
               without stifling innovation, an informed                          a nanotechnology-focused think tank,             scientists who accept Drexler’s ideas – even
               public dialogue about the realities of                            the Foresight Institute. Drexler’s ideas were    Drexler himself – do not see an attack of
               nanomaterials’ pros and cons, both its                            magnified to a much larger audience by           the nanobots coming anytime soon, if ever.
               white and its black magic, will be                                 an August 2000 article in Wired magazine        Luminaries such as Cambridge university’s
                                                                                 by Bill Joy, then Chief Scientist at Sun         Professor of Nanotechnology Mark Welland
               healthy for everyone. Nanotechnology                              Microsystems and all-round technical guru.       and the Nobel Laureate and co-inventor of
               is complex, and the effects of various                                                                             Buckyballs Harry Kroto put it firmly in the
               nanoparticles on human welfare and the                            Drexler’s idea was that nanotechnology           realm of comic books.
               environment will not lend themselves to                           could create tiny machines, sometimes
                                                                                 called molecular assemblers, or nanobots.        Still, there is one aspect of the nanobot
               an easy, one-size-fits-all approach.                              Their main job would be to do                    worries that could be put to rest today: the
                                                                                 nanochemistry – synthesizing compounds a         lumping together of nanobots and
                                                                                 few atoms at a time – which could be             nanomaterials.
                                                                                 incredibly handy when it comes to making
               3                 things like drugs or computer chips. And         Yes, both are very tiny, both involve
                 ?a=f                                                            here comes the kicker: the nanobots would        nanotechnology, but otherwise they are not
               4                  also be able to clone themselves. Create         really similar. So treating their potential
                                                                                 one, feed it, and soon you have a whole          benefits and dangers as one and the same
                 executive_summary_5_1_08.pdf                                    colony beavering away.                           is inaccurate and unhelpful. Clearly, both
               6                                                                  nanomaterials and nanobots are serious
                 la-op-salvi-kimbrell26feb26,0,4037148.story                     However, there could be a catch. As Drexler      issues, and both are worthy of serious
                                                                                 speculated in a 1987 book, Engines of            attention. But they are separate issues,
               8                   Creation: The Coming Era of                      and moreover, nanomaterials already are
                 EPAOpensPublicCommentPeriodConcerningNanotechno-                Nanotechnology, the little critters just         on the shelves in everyday products, while
                 logyRegulation.aspx                                             might take over the world. In a scenario         nanobots exist only in the comics.

    12      INDuSTRY INSIGHT
                                                                                                                                   Size of nanoparticles,
                                                                                                                                   measured in billionths
                                                                                                                                              of a meter.

                                                                                                                                             (sEE pAgE 2)

                                                                                                                                       10            12
NANOTECHNOLOGY                                                                                                                  Projected revenues from
                                                                                                                                      nanotechnology in
                                                                                                                                      u.S. dollars, 2015.

FACTs And FIgUREs                                                                                                                            (sEE pAgE 4)

AboUT nAnoTEChnology
Nanotechnology refers to the methods of manipulating atoms and
molecules to create new structures. Nanoparticles measure less than
100 nanometers (nm), or a billionth of a meter. Engineered
nanomaterials are extremely pure and may not act in the same way as
                                                                                                                             Portion of nanotechnology
the material in bulk state. Zurich is piloting the Zurich Nanotechnology                                                     research subsidies devoted
Exposure Protocol™ (ZNEP™) to help our customers understand how                                                                           to toxicology.
to manage the potential risks from this new technology.                                                                                      (sEE pAgE 8)

                                                                                                                                    Estimated number of
                                                                                                                                hospitalizations wrongly
                                                                                                                              attributed to nanoparticle
                                                                                                                             exposure by ‘Magic Nano.’

                                                                                                                                           (sEE pAgE 10)

DISCLAIMER: The information in these articles was compiled from sources believed to be reliable. Zurich Financial Services Ltd or any of its subsidiaries
(the ‘Group’) does not guarantee the accuracy of this information or any results and further assumes no liability in connection with this publication,
including any information, methods or safety suggestions contained herein. Moreover, the Group reminds readers that these articles cannot be assumed
to contain every acceptable safety and compliance procedure or that additional procedures might not be appropriate under the circumstances. The
subject matter of these articles is not tied to any specific insurance product nor will adopting these procedures ensure coverage under any insurance policy.
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