KNOWLEDGE LIVE: Insurers must innovate to cover emerging risks

Insurers are not demonstrating enough innovation when it comes to helping clients manage emerging risks, according to attendees at The Knowledge Live in Bristol.

While delegates discussed how insurers could improve their approach to emerging risks, the prevailing theme of the day was how to tackle the challenges presented by the changing risk environment.

Zurich strategic risk practice manager UK Tilden Watson spoke to brokers at The Knowledge Live about emerging economic and environmental global risks and what factors brokers need to consider when talking to clients.

Watson had four key points to take into consideration when analysing risks.

“Risk horizon makes a big difference to our risk thinking. The second key point is risk is becoming more interconnected. We are seeing things on the other side of the world having an impact on businesses in this country,” Watson said. “The next point is around the speed of risks. The speed of these things is quite critical for companies, because often things are happening out there and the world will know about it before us.

“The final thing is we have a culture of risks. One organisation may interpret a set of facts in one way, and another organisation may interpret them in a different way.”

Lack of innovation

But delegates at the event thought insurers needed to show more innovation to provide products that meet the needs of their clients.

When asked whether they thought insurers were innovating enough when it comes to emerging risks, 61% of attendees said no, 6% thought insurers were doing enough in this area and 32% thought only some were innovative enough (see graph below).

The evolution of cyber

Attendees also heard from Jelf Insurance Brokers regional managing director Lee Davey who discussed the growing threat of cyber fraud and the need to educate clients on the myths surrounding cyber policies.

Davey said: “The risk keeps evolving and technology keeps evolving. With the best will in the world the insurance market will tend to be one step behind. It’s up to brokers to put pressure on our insurer partners to make sure we are providing cover for our clients that mitigates those emerging risks.”

The audience poll found that the key reasons behind the slow uptake of cyber policies were clients being unaware of the impact a cyber attack could have on their business and many clients assuming it is only large firms that are likely to be targeted by cyber attackers (see graph below).