These are the top 3 emerging risks for re/insurance says Swiss Re
A new crisis in the emerging markets, the “great monetary experiment” and internet fragmentation are the three biggest emerging risks for the re/insurance sector.
Swiss Re’s SONAR report highlights a total of 21 emerging risks that it says the re/insurance industry should keep on its radar.
"Risk management is not just about managing risks in the present. It is about anticipating future ones to make sure we will be in a position to deal with them," says Patrick Raaflaub, Swiss Re's Group Chief Risk Officer. "These risks may only fully reveal themselves to future generations. That doesn't mean that we shouldn't act today to reduce uncertainty and alleviate their burden."
The top 3 risks may be seen in the short-term – within the next 3 years.
Turmoil in emerging markets could result in global insurers being limited in their expansion plans in these markets. There could also higher underwriting costs if civil unrest ensues.
Monetary policies such as negative interest rates have unknown outcomes and the “experiment” could result in lower economic sentiment.
Finally, disconnecting IT function from the global internet with the intention of making connections safer could result in higher operating costs and disruption to insurer’s business models.
Payroll firm launches small business benefits, takes aim at brokers
A San Francisco payroll software firm has launched a new product which could cause more pain for Zenefits and brokers. Gusto has a customer base of 30,000 small businesses for its payroll services and will now also offer health benefits through its integrated platform.
Health insurance policies can be transferred to Gusto in 8 states and co-founder and CEO Joshua Reeves is unlikely to make any new friends among insurance brokers: “I was shocked to learn that 60 per cent of customers who transfer their existing health insurance coverage to Gusto arrive with legacy broker errors,” he said.
Oklahoma may force insurers to gain pre-approval for quake rate rises
The insurance regulator in Oklahoma says it may require insurers to submit proposals to increase earthquake coverage rates for approval. The Oklahoma Insurance Commission said Tuesday that it is concerned that rates are rising amid narrowing competition in the state, at a time when the number of quakes are increasing.
The state has seen quakes rise from just a few a year a decade ago to a few hundred a year now due, the regulator says, to increased seismic activity around disposal wells used by the oil and natural gas industry.
Insurers at the public hearing Tuesday said they were opposed to the proposal for pre-approval of rate rises.
