Risk Mitigation Progresses to Tipping Point. It's No Longer Enough to Just Insure  February 8th 2023

CEO Viewpoint: It’s No Longer Enough to Just Insure

The expansion of the insurance value chain to include risk mitigation has been underway for decades. But in recent years, it’s been rapidly progressing toward a tipping point where the “insurance” sector brand will be reinvented as “risk management and insurance.”

Historically, insurance providers have organized their businesses around balancing premiums and claims. But going forward, the insurance business must center on predicting and preventing losses for organizations and consumers.

With this shift, the opportunity for insurance professionals to make a difference is huge. We can help people and businesses minimize risk, prevent losses and avoid huge costs (financial and otherwise). Using a predict-and-prevent approach also provides customers a way to sidestep the tasks of filing claims and the demands of recovering from catastrophe.

Peter Miller, President, CEO, The Institutes

'My Watch Thinks I'm Dead'

That's the headline on a recent New York Times article: "My Watch Thinks I'm Dead." It seems that the Apple Watch's recent addition of a feature designed to detect low-speed car collisions and to send help if the wearer is incapacitated interprets lots of events as collisions and automatically dials 911. The problem is especially acute among skiers, who not only get bounced around on the slopes and frequently stop suddenly but may be wearing so much clothing that they don't hear the alarm from their watches in time to head off the emergency calls.

The calls not only create obvious problems for emergency services, many of which report being overwhelmed, but point to a broader problem with false positives that I frequently see distorting thinking about innovation.

There can be something a bit amusing about technological screwups. All that brain power behind this fancy technology, and they did what?

The Times article does have plenty of "huh?" moments. It also points, though, to even more serious issues with false positives. We often see something described as a breakthrough because it's 90% accurate at something — but that means it's 10% inaccurate. And many "breakthroughs" are more like 65% accurate.

Paul Carroll, Editor-in-Chief, Insurance Thought Leadership

Better imagery helps insurers handle rapidly changing claims

Risk profiles of insured properties evolve over time and it can be challenging for property and casualty insurers to update policies to keep pace with normal year-to-year changes. Climate change adds a substantial wrinkle to the equation by increasing the frequency and impact of natural disasters. Access to visual data will be critical for P&C underwriters and adjusters to help their customers recover quickly from disasters, as well as to mitigate and adapt to future changes that impact the claims environment.

Are Personal Lines Insurers Accelerating Transformational Tech Plans Post-Pandemic?

The COVID-19 pandemic was a catalyst for technological change across the insurance industry, especially within personal lines. Customers demanded virtual and digital interactions, so insurers responded by accelerating the development and investments in transformational technologies. Although it may not be accurate to classify our current era as post-pandemic, insurers have adjusted their plans to match the needs of society today.

Crawford’s Verma: 100-year event metric is no longer relevant

The increased frequency of high-severity events has rendered the 100-year event metric almost redundant, said Crawford CEO Rohit Verma, as he reflected on the impact of recent natural catastrophes. Speaking with The Insurer TV on the latest episode of Close Quarter, Verma observed that every year in recent history has in some way marked a record from previous years in terms of severe weather events.

“We are definitely seeing a tremendous impact in terms of severe weather,” he said. “One hundred-year events are no longer 100-year events. They are happening a bit too frequently.

“On the one hand in some regions – Australia and California – we are seeing extreme forest fires, and then we see extreme flooding. US windstorm has become more frequent and severe in the last decade and we think severity more generally [for nat cat] is only increasing,” he said.

According to a recent report from Gallagher Re, insured natural catastrophe losses surpassed $140bn in 2022, with Hurricane Ian representing the largest loss at $55bn.

Coalition launches inaugural cyber threats index

Cyber insurer Coalition has published its first annual cyber threats index, which provides detailed insights on cybersecurity trends for the year 2022 and the emerging cyber threats businesses should prepare for in 2023.

The annual report used data gathered by the insurer’s active risk management and reduction technology, combining data from underwriting and claims, internet scans, and Coalition’s global network of honeypot sensors and scanning over 5.2 billion IP addresses. Coalition’s honeypots observed cyber attacks from the inside to develop a deeper understanding of attackers' techniques over the span of 22,000 events.

Based on data from the last ten years, Coalition predicted over 1,900 new common vulnerabilities and exposures (CVEs) per month in 2023, a 13% increase in average monthly CVEs from published 2022 levels. These 1,900 CVEs included 270 high-severity and 155 critical-severity vulnerabilities.