Insurers ‘too quick’ to exclude emerging risks

Insurers are “too quick” too exclude emerging risks, Typhaine Beaupérin, chief executive at European risk management association Ferma, has said.

Speaking at the Ferma Forum 2024, Beaupérin said risk managers were having ”rising concerns over the insurability of critical and key business risks”.

For example, Ferma’s latest Global Risk Managers Survey found that 53% of participants felt some core risks will become uninsurable in the future.

Beaupérin said: ”The number of risk managers who have real concerns has risen from 41% two years ago to 53% today.

“What is a real concern is the response of insurers. They are too quick to simply exclude these emerging risks. It is not a solution.”

Trends

In addition to exclusions of specific risks, the report also showed that trends risk managers were seeing in the insurance market included increasing premiums and reductions in capacity.

It added that challenging market conditions was resulting in risk managers adapting insurance strategies and programmes accordingly.

For example, 54% of survey respondents have changed their buying patterns following a review of areas such as coverage requirements, limits and sub-limits. 

“Risk managers recognise the increasing influence of economic shifts, geopolitical uncertainty, regulatory developments and the changing risk environment on insurance market dynamics,” said Charlotte Hedemark, president at Ferma.

”In response, they are advising organisations appropriately and taking considered and necessary actions to adapt their buying strategies and prevention activities, particularly given expectations of further market hardening.”