With global political volatility on the rise, terrorism coverage will require extra vigilance, while new technologies shift the landscape of challenges and opportunities for re/insurers, according to broker Guy Carpenter.
New technologies, big data and predictive analytics, coupled with the “sharing” economy are some of the major emerging factors for insurers in 2017.
David Priebe, Vice Chairman of Guy Carpenter and Head of GC Securities, said; “The 2017 (re)insurance market will be challenged to offer solutions that utilize increasing amounts of capital effectively in a complex landscape, requiring insurers to be increasingly diligent and responsive to prepare for the uncertainty ahead.”
In keeping up with insurer needs, reinsurance is adapting to the evolving nature of terrorism with a focus on closing gaps in existing coverage.
Priebe continued; “With the current abundance of capacity and low interest rate environment, the complexity of the industry’s issues will make for a challenging yet impactful year ahead.
“We’re continually adapting to evolving markets to ensure our clients are provided with the product offerings that best meet their needs and the needs of their constituents to adequately insure a vast range of problems.”
That the insurance and reinsurance market needs to be vigilant on terrorism risks is a given, but there is also a need for vigilance within the global reinsurance market as full terrorism cover is increasingly offered within property catastrophe programs.
Market sources suggest that as many as 75% of U.S. property catastrophe reinsurance programs now see some element of terrorism coverage bundled, often given away for no rate. That means exposure to terror risk is likely much greater than the terror insurance and reinsurance market size alone would belie, making caution on terrorism cover necessary.