VIEW: Universal problems, universal solutions

For our insurance clients all around the world, 2021 has been a year of great change. Global Insurance Law Connect recently published its third Risk Radar, looking at trends in insurance around the world. This year, for the first time, many of the critical issues that our lawyers report in their different markets have converged, with a truly universal focus on cyber security, climate change and the impacts of the pandemic.

The pandemic put a stop to the world as we knew it. In pure claims terms, we are yet to quantify the full costs and impact because so many cases across the world are being hard fought by both sides. Some cases are settling, but not in all markets, and overall the BI cases currently in litigation will impact the insurance industry, reputationally, if not financially.

However, on the positive side, the last year has seen the opportunity for digital innovation in the insurance industry finally enacted. It is said that the first three months of lockdown accelerated the digitisation of the insurance world by five years. In country after country, we hear reports of innovations in products, customer service, and claims processes. Client service, if nothing else, has benefitted from the shifts caused by repeated lockdowns.

Yet, fast digital innovation and home working has also highlighted the vulnerability of IT systems, and the increase in cyber risk is yet to be properly understood or measured. We must balance the risk and the reward in this growing market segment, which, in the last 15 months has globally been battered by both an increase in the number and cost of claims.

The final shared issue is climate change. In many countries, insurers have begun to work on developing new covers linked to new energy sources and adapted lifestyles. It can only be a positive if we can move from seeing climate change as a preventer, and instead see it as a catalyst for innovation, and for helping clients to manage new and different risks.

And in this environment, it is all the more important that different markets and geographies share approaches, regulatory challenges and stories of innovation. Let’s work together to innovate on this critical issue for us all.

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