Talk of rising premiums after catastrophic losses, supply chain risk, cyber risk and emerging risks buzzed through the estimated crowd of 9,000 at the Risk and Insurance Management Society’s Annual Conference & Exhibition in Philadelphia in April. Here are some takeaways.
The tornado activity of 2011—more than 100 twisters—challenged the industry’s pricing of this risk, says Tom Fitzgerald, Aon’s new CEO of U.S. Retail. A more thoughtful approach to the storms’ far-reaching effects now includes raising deductibles. Supply chain risk is still top of mind after last year’s floods in Thailand, and Fitzgerald predicts cyber coverage will be a part of more portfolios since “the potential losses are huge.”
David J. Bidmead, Marsh’s CEO for the U.S., says cyber risk is a big concern, especially in retail and healthcare. Awareness of cyber risk is also dawning among attorneys who hold confidential, highly valuable information in their data banks on M&A activity that could move the markets. Bidmead forecasts an aggressive bidding war for talent in the insurance industry as more experienced employees who have been through a hard market become more valued, and adds that carriers are returning to a more technical approach to underwriting risk.
Expect to hear more about environmental risk, says William Hazelton, executive vice president at ACE USA, since some 2,500 new regulations have been put in place and established rules attract more robust enforcement. Pharmaceuticals in groundwater and facility-spread illnesses are serious concerns for Big Pharma and healthcare providers, he adds.
Cyber risk is a major focus for FM Global and so is preventing loss in emerging markets, says Thomas Lawson, executive vice president, who adds that many current Fortune 1000 clients expect to have infrastructure in Asia. A new world of risk.