The 2020 edition of Global Insurance Law Connect’s (GILC) Risk Radar report is out, and Insurance Business brings you the highlights from the section on the Australian insurance market.
GILC member firm Sparke Helmore Lawyers, which provided the commentary for Australia, identified three “stand-out” issues that are said to be creating significant headwinds for the industry. These are climate risk, technology, and the war for talent.
“With the increasing losses experienced in recent years due to the sheer magnitude and frequency of extreme weather events and the resultant reduced availability and affordability of insurance, there is a real danger that markets will shrink and expose consumers and governments to additional financial burden,” noted Sparke Helmore.
“Insurers are having to manage the intersection between policies, risk premiums, and price to strike a balance between the viability of business and societal expectations.”
As for the issue of technology, the report pointed to the potential for a disruptive threat landscape that comes with technological advances. It cited privacy and cyber risks as well as the need for enterprise-wide oversight of all conceivable eventualities.
In the area of talent demand, the law firm had this to say: “With the complex claims function a particular focus – and seen as an area of insurance lacking in quality career progression – there is a sizeable gap between qualified professionals and the demand for them. The demand for experienced brokers will only increase as well as for those with niche skills in risk, compliance, and analytics as well as experts in climate change.
“It’s worth also keeping in mind that consolidation in the insurance industry could scare away those who might have otherwise considered the insurance industry as an attractive opportunity. And with the human touch now being a differentiator and the antithesis to what is fundamentally a technology-driven industry, attraction and retention of the right people with the right skills is only going to get harder for insurers.”
Aside from Australia, the latest Risk Radar issue also shines a spotlight on Belgium, Brazil, China, England and Wales combined, Finland, France, Germany, India, Ireland, Italy, Luxembourg, Mexico, Norway, Scotland, Spain, Switzerland, Taiwan, and the US.
