A new report from ICMIF Supporting Member AM Best highlights how environmental, technological and social trends have driven the rapid evolution of the global risk landscape in which insurers and their policyholders operate over the past decade. Risks are becoming more complex and interconnected, says AM Best, with emerging and intangible risks, such as cyber; non-damage business interruption; and regulation and reputation; growing.
The new Best’s Special Report, (Re)insurers Adapt Practices to Address Evolving Risk Landscape, also notes that changing climate trends and higher concentrations of assets and lives in vulnerable areas are increasing the costs associated with natural catastrophes.
Meanwhile, as the report details, the COVID-19 pandemic has also provided a clear demonstration of how interconnected global risks have become and has served to accelerate existing trends affecting the risk landscape, such as digital transformation and the shift to business models based on intangible assets.
The pandemic has also served to increase risk awareness, highlighting the importance of risk mitigation and management, and has exposed protection shortfalls. All of these factors have potential implications for insurance demand. AM Best believes existing coverage gaps, as well as new risks and changing protection needs, present a significant opportunity for insurers.
To access a complimentary copy of this special report, please click here.