Claims News
The UK’s flood defences offer only limited protection against the likely impact of climate change, according to a new study by Moody’s RMS and Flood Re. The report suggests that while investment in flood defences can be effective in reducing additional losses from climate change, there are diminishing returns from such investment beyond a certain level without property-level flood resilience measures and strategies to address the management of surface water. The research focuses on future flooding in two major conurbations exposed to severe flood risk: York, with a dense population and strong defences; and Pontypridd, with a lower population and lower standard of defence protection. It exposes the vulnerability of both areas to their existing defences being breached in the run up to 2040 – the year after Flood Re is expected to exit the UK insurance market – and the projected increases in the costs of future events. (CIR, 29/11/2023, 'UK flood defences not enough to meet climate change challenges – study')
NorthStandard’s Strike & Delay class has introduced weather cover into its suite of risks, providing shipowners and charterers with what it says is the first marine insurance protection to mitigate the threat posed to ships solely by adverse weather conditions. The marine insurance product offers up to eight days of cover against the risks of a ship being delayed in or outside a port due to bad weather, as part of NorthStandard’s broader Strike & Delay package. (CIR, 30/11/2023, 'NorthStandard to provide additional cover for adverse weather')
International freight insurance provider TT Club has warned organisations involved in the supply of plastic pellets or ‘nurdles’ of the dangers to the marine environment of spillage, urging them to take steps to ensure their safe carriage. The insurer says that with the ever-increasing focus on care for the marine environment, greater attention must be afforded to the particular risks associated with the transport of microplastic pellets. Commonly referred to as ‘nurdles’, the plastic items are the building blocks used in the production of most plastic products. Concerns about the universal use of secure packaging, as well as the stability of these receptacles and their weight distribution within sea containers are mounting. (CIR, 30/11/2023, 'Warning over environmental risks of transporting plastic pellets')
Cyber security risk consultancy S-RM has warned that over the last two months law firms have increasing become targets for cybercriminal groups that specialise in business email compromises. While BECs are not a novel cyber threat, the frequency and sophistication of these attacks have reached new heights warns S-RM, with law firms being disproportionately affected. It says many new tactics employed by these threat actors effectively circumvent multi-factor authentication measures, making it increasingly difficult for firms to protect themselves through traditional means. (CIR, 29/11/2023, 'Law firms facing surge in email compromise attacks')
According to GILC, growing consumerism, the globalisation of supply chains, the emergence of new technologies and the need to innovate are driving an increase in product liability claims around the world. In particular, electronics, software and digital devices are now subject to a wider range of claims, including those involving cyber security and data privacy. The emergence of new technological platforms and tools, such as artificial intelligence and their increasing integration into daily life – both at home and at work – has presented issues for legislators and regulators alike. Despite the recent spike in interest in AI, this exciting sphere is still poorly understood; and, although technology and data protection legislation is becoming more common globally, regulations that are specific to AI are still a work in progress. (Giorgio Grasso, 22/11/2023, CIR, 'GILC's VIEW: On the impact of AI on claims')
Severe weather pattern changes are playing a key role in increasing North American wildfire risk in four regions that were previously considered to be at low risk, according to research from Chaucer. The Appalachians, Southern Rocky States, Alberta and British Columbia and Texas are quickly becoming areas of concern for catastrophic wildfire insurance losses, the data suggests. Dana Foley, Head of Catastrophe Research at Chaucer said: “An increase in severe weather is directly causing key wildfire risk factors to increase, which has dramatically heightened the risk of catastrophic wildfire damage in areas that were previously not of major concern for insurers." (CIR, 14/11/2023, 'Wildfire risk increasing in previously ‘low-risk’ areas of the US')
QuestGates Ltd has announced it has strengthened its position within the UK claims and loss adjusting sector with the acquisition of QCH LEGAL LTD. Chris Hall, Managing Director of QuestGates said, “we are delighted to welcome QCH to the QuestGates family. The addition of legal services to our ever-growing claims management offering is a natural and exciting step for the company.” (QuestGated Ltd, 7/11/2023, LinkedIn)
Specialist insurance provider, CFC, has upgraded its packaged cyber insurance policies for professional services businesses. Brokers selling CFC’s professional liability policies can offer their SME clients add-on cyber cover that now includes broad cyber crime coverage, as well as giving SMEs access to CFC’s proactive cyber attack prevention services and incident response capabilities. (CIR, 21/11/2023, 'CFC enhances professional services cyber cover')
Direct Commercial has launched a new broker portal providing brokers with more functionality and accessibility to the MGA’s services. With its new tracker, brokers will be better able to keep track of a claim’s progress, and apply appropriate filters for specific updates and insights about their policyholders’ claims. While the portal enhances Direct Commercial’s broker service, the firm says the key facets of its interaction with brokers on claims will remain, including its quarterly claims review. (CIR,16/11/2023, 'Direct Commercial launches new broker portal')
Despite concerns over the macroeconomic and geopolitical climate, UK PI insurers remain confident as 2024 approaches. A significant majority (95%) expect their appetite for business to increase or at least to remain the same over the coming year, according to law firm Clyde & Co’s latest annual survey of the market. In response to the survey carried out at the end of summer, insurers said that they felt an improved sense of stability in the UK PI market, expressing confidence in the levels of available capacity and a clear expectation that buyers will be able to maintain existing policy limits. (Deborah Ritchie, 15/11/2023, CIR, 'UK PI insurers buoyant despite economic headwinds')
Insurtech Anansi has partnered with Tokio Marine HCC, Liberty Mutual and Arch Insurance to develop a specialist parametric goods-in-transit insurance tailored for large retailers. With Tokio Marine HCC as the lead insurance capacity provider and underwriter, and the arrangement facilitated by GAWS of London, this venture marks GAWS' initial step into parametric cover. The new claims solution, which triggers automatic payouts for lost parcels and simplifies damage claims processing, is designed to ease the administrative load on retailers facing supply chain disruptions and escalating business costs. (CIR, 14/11/2023, 'Insurers partner on parametric product for large retailers')
Broker WTW has launched an Asia Pacific climate risk centre in Singapore. The centre will provide climate risk quantification and management capabilities to support the region’s resilience and transition to net-zero. WTW says the centre will support corporates, financial institutions, insurers and governments in understanding, quantifying and building resilience against climate risks. It will focus on physical and transition climate risk assessment and quantification through top-down and bottom-up methods and proprietary models. (CIR, 8/11/2023, 'WTW launches APAC climate risk centre in Singapore')
Recent adverse weather could leave the insurance sector exposed to heightened fraud risk, according to claims services provider McLarens. The firm, which focuses on complex, commercial and specialty markets, has warned insurance and claims professionals to be vigilant as fraudsters look to take advantage of recent surge events. Brendan Gillooly, Head of Investigation at McLarens UK & Ireland, said: “As we grapple with the aftermath of successive weather-related events, the risk of fraudulent claims looms large, threatening to exploit the pressures insurers face when dealing with an influx of genuine claims". (CIR, 7/11/2023, 'Warning of increased fraud risk amid weather-related events')
Organisations are increasingly aware of the potential cost of reputational damage, but as awareness increases, confidence in their risk management systems and crisis response capabilities has fallen since 2021, according to a report by WTW. The reputational risk readiness survey polled 375 senior executives from global businesses across 20 countries, each responsible for risk strategy. Companies span the retail, manufacturing, leisure, transportation, and NGO sectors. The study found that environment, social, and governance risks are three of respondents’ top five reputational concerns. Reputation is now a top-three risk for 26% of companies, up from 18% in 2021, and a top five risk for 55%. (CIR, 6/11/2023, 'Resilience to reputational risk perceived to be falling')
As businesses, communities and the insurance sector count the cost of the latest storm to hit the UK, there are calls to better integrate insurance and resilience to create a system that is fit for purpose. Many of those affected by Storms Babet and Ciarán have faced the devastation without insurance cover, either because it was too expensive or difficult to obtain. Others have suffered damage which could potentially have been mitigated or avoided. Dr Eugenia Cacciatori, senior lecturer in management at Bayes Business School (formerly Cass), warned that insurance schemes need to be more widely accessible and better integrated with resilience schemes if they are to meet future needs. She said: “Insurance can be a very important part of building resilience to the increase in weather-related disasters we are beginning to witness, because it provides money to rebuild and help in rebuilding better.” (CIR, 3/11/2023, 'Call for greater integration in insurance and resilience flood strategy')
AXA XL Risk Consulting has launched a water impact and sustainability evaluation tool, intended to offer a remote, customisable solution to helps risk managers to evaluate and act on water risks. WISE evaluates risks across three key components – physical, regulatory, and reputational – in addition to considering process efficiency and business continuity, with the aim of providing an adaptable evaluation framework. Jonathan Salter, Global Head of Risk Consulting at AXA XL, said: “Water-related issues including water scarcity, poor water quality and flooding can have a significant impact on a company’s risk profile. WISE helps clients to better understand their evolving exposure and how to address these challenges. (CIR, 1/11/2023, 'AXA XL launches tool to help evaluate and manage water risks')
Neil Gibson has been named CEO of Sedgwick in the UK. With 18 years’ insurance industry leadership experience and decades of operational claims management and colleague development expertise, Gibson most recently served as COO of Sedgwick’s operations in the UK, New Zealand, Middle East, Africa and Asia. He also serves on Sedgwick’s global environmental, social and governance committee. (CIR, 13/11/2023, 'Sedgwick appoints Gibson UK CEO')
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All information provided in this Market Digest has been gathered from Claims Mag and CIR.
