The property/casualty insurance industry depends on lots of data to develop products and price them, making the coverage of new risks a significant challenge for underwriters, a London specialist says.
Executive SummaryIf insurance carriers and agents want to stay in business, they have to pay attention to how technology is changing the business they operate in and react to it appropriately, whether that be through online sales portals or policies that address technology risks, according to Graeme Newman, marketing director at London-based CFC Underwriting, who also observes that a data-dependent P/C industry tends to struggle with emerging risks for which there is no loss data to analyze.
Carriers try to address new risks, particularly those relating to technology, but they tend to be risk-adverse where there is little data to go on, according to Graeme Newman, marketing director at London-based CFC Underwriting.
“An emerging risk is any type of new risk that comes about as a result of a fundamental change in either the world we live in, the way we operate, the way we work, or the environment,” Newman says. “The problem with new risk is that we don’t have hundreds of years of loss data in order to quantify and assess what it is that we are actually trying to insure,” he says.