The top challenge currently facing London Market companies is climate risk, a new International Underwriting Association survey has revealed.

Some 27% of respondents cited climate and ESG as the top challenge, folliowed by regulatory change (for 22%) and COVID-19-related challenges, particularly the shift to remote working (17%).

IUA chief executive Dave Matcham said: “Over the past couple of years we have seen climate risk emerge as a dominant topic across many of the London Market forums run by the IUA. Companies are focused both on providing cover for more extreme weather events and helping clients manage transition risk as the global economy moves to a more sustainable operating model. There is also a great deal of work being done in response to new climate risk regulations and to consider the environmental impact of firms’ own business operations.

“It is interesting to see how priorities have changed since our last member survey in 2017. Back then the biggest challenge facing companies was the soft market and general pricing, followed by Brexit. There are, however, some perennial concerns – particularly regulation and a growing compliance burden.”

Climate risk also came out on top when IUA members were asked what are the most important emerging risks for insurance coverage? Here it accounted for 45% of all answers, compared to a total of just 7% when the same question was asked in a similar member survey four years ago.

Elsewhere, data standards were identified as the most important issue for the digital transformation of London Market central services, followed by claims processing in second place. Also important were electronic placing, accounting and settlement and driving adoption of market solutions.

Matcham added: “Our survey results show that approval for the IUA’s activities is very high and has grown significantly in recent years. Members feel that the association has an important role to play, both in supporting their own personal business role and the interests of their firm more generally. I would like to thank all of our member companies for their continued backing.”

The IUA member survey was made up of responses from individuals across 44 different London Market companies.

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