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A senior figure in the field of loss adjustment has offered his insight into the possible trends which are set to emerge in 2019 - and it seems cyber is moving front and centre.
“Industrial clients now have awareness of cyber risk on the back of heavy insurance product marketing,” says Andrew Hodkinson, regional head of Charles Taylor Adjusting’s Australia and New Zealand operations. “Consequently, these insureds are now, more than ever, reviewing their cyber security and the risk managers are trying to establish the ‘worst case’ attack which they might face.”
While clients have a greater appreciation for the cyber risks they face, Hodkinson says it’s likely we’ll see an increase in the number of attacks.
“We expect to start to see more cyberattacks to industrial assets with perhaps more physical damage consequences,” he tells Insurance Business.
Hodkinson also warned that catastrophe claims will continue to rise as the population and industrialisation spreads at an ever-increasing rate.
“Power claims will be more challenging and interesting in these scenarios as the shift from hydro carbon to renewables and battery storage becomes more mainstream,” he adds.
When asked if the claims trends were specific to Australia or consistent globally, Hodkinson stressed that the cyber issue is a universal obstacle.
“The cyber challenge is a global problem with first world countries more likely targets. Australia is such an industrialised country,” he said. “Catastrophe claims affect all regions but in different ways. The severity and duration of such events appears to be increasing but this is more a function of an increased human footprint on the planet.”
While there is certainly no shortage of challenges for the insurance sector in 2019, Hodkinson says he’s far from worried.
“The insurance industry is adaptable and large – it has a great ability to evolve, to stay relevant, and to this end the evolution will no doubt continue,” he tells Insurance Business. “The trick will be to evolve with it, if not ahead of it.”
