The commercial insurance industry’s longevity relies on its adaptability to emerging challenges unique to the fourth industrial revolution, according to Airmic Chief Executive Officer (CEO), John Ludlow.
Speaking at Airmic’s annual conference in Liverpool, Ludlow pointed out that rapidly changing business models and the rise of cyber-technology is creating new risk landscapes while simultaneously creating unprecedented opportunities and challenges for both insurers and risk managers.
Ludlow stated, “We’ve been talking for years about the need for insurance to cover risks to intangible assets yet, despite our best efforts, we’ve made very little progress. In some areas, like business interruption, there’s a perception that things have actually gone backwards.”
Citing a recent statistic that indicated 82% of Fortune 500 companies’ value now resides in intangible assets, Ludlow commented, “We know that the commercial insurance market is very experienced at protecting physical things like property, but that is not where the future lies for most of its customers.”
“Threats to reputation, cyber, supply chains and other intangibles are what really worry them and insurance needs to be able to find solutions. Otherwise it will cease to be central to the risk management of most large companies.”
“This is a challenge equally for buyers, especially in the way they use and gather data and understand the wider risk picture in order to use insurance strategically and maintain the interest of the C-Suite. If insurers, brokers and buyers can work together to resolve these challenges – and I am sure we can – then the future will look bright.”