A bulletin from Munich Re notes that the “risk landscape for insurers and their clients is changing faster than ever before, especially in terms of technologies, services, sales channels and demand patterns.” As a result the world’s largest reinsurer has been working with its clients and partners “in order to find appropriate new insurance solutions.”
The bulletin duly notes that “dynamic market change may bring countless opportunities, but it invariably also brings new risks.” Munich Re’s client survey of those changes found that “some three quarters of insurance companies said they believe that digitalization will have a dramatic impact on the industry.
“In order to respond appropriately to these developments, insurers need to be able to analyze the different technologies and how people use them. A prime example of this is autonomous driving: the more influence the underlying technologies have on driving behavior, the more liability will change and extend to the manufacturers.”
Munich Re said its view is that “accident victims should continue to expect compensation regardless of the technology used. At the same time, insurers must also be able to seek recourse from the manufacturers. In order to find risk-commensurate solutions, insurers need to be able to assess these increasingly complex and rapidly changing technologies and the associated liability issues, not to mention the range of different national regulations that need to be observed.”
Driverless cars aren’t the only challenge the re/insurance industry is dealing with. Munich Re’s report indicates that the “continuing spread of digitalization is changing nearly all economic sectors and areas of our everyday lives.”
Munich Re Board member Ludger Arnoldussen explained: “The demand for insurance solutions to combat cyber risks will increase rapidly. It will be necessary to consider quite diverse client profiles, ideally by way of modular product systems.”
These would include “global partnerships, for example with IT providers and scientific institutes, a broad knowledge base and managing risk accumulations are further pillars for the coverage of cyber perils,” the bulletin explained.
“In a fast-changing market environment, close client contacts are essential. We are also taking a new approach by way of cross-sector partnerships and cooperation initiatives”, added Arnoldussen.
As an example Munich Re cited its work with “a specialist company from Silicon Valley on data analysis for a pandemic cover against the infectious disease MERS.” It also noted that “cyber risks have been re-evaluated in cooperation with a software company, and with the support of a start-up company it has been possible to drastically reduce the processing times in underwriting disability insurance. There are also specific cooperation initiatives with scientific institutes, for example in order to use the results of a testing facility for autonomous vehicles.”
Source: Munich Re
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