Moody’s Insurance Solutions says risk is changing and the business environment is changing, “with insurers reaching for an inflationary business playbook that they haven’t used for 20-30 years,” says Robert Muir-Wood, chief research officer with Moody’s RMS in a recent post, The 10 Major Risks Shaping Insurance Today.
“Looking down a typical list of risks, some will be dismissed as too far in the future that they can be ignored, or too obvious that they have already been considered and evaluated,” he writes.
Crumbling infrastructure
Insurers, he adds, have many questions, including how infrastructure that was designed before we knew our climate would change, will hold up under new weather extremes. (Crumbling infrastructure is one of the risks examined in the roundup; the “many, many tipping points of climate change” are another.)
The risks discussed also include the rapid proliferation of cyberattacks, an everyday occurrence now, with the potential to stop operations at any time. “The challenge for insurers is to use frameworks that best capture this peril,” he adds.
Green technology
Regarding net-zero, he says the path to net-zero is intricate with many risks along the way. “New green technology presents many opportunities for insurers to open up new lines of business and look to reduce their exposure to carbon-intensive sectors, but it also presents new risks for the insurance industry.”
Unprecedented economic shocks, the challenges of insurability for catastrophic perils, global supply chains, war and the return of long-tail liabilities are all discussed, along with changes in longevity and mortality.
“These risks are affecting all businesses, the business of risk itself and the state of the risk landscape,” Muir-Wood writes.
