Technology is expected to be a major driver of liability claims in the years ahead – cutting frequency and increasing new threats such as cyber, product liability and recall risk, according a report published by Allianz Global Corporate & Specialty (AGCS)
So-called smart factories, for example, will likely reduce workplace accidents and driverless cars are expected to dramatically reduce accident rates over time, given the fact that more than 90 percent of auto accidents are believed to be caused by human error, said the AGCS report, quoting UN statistics.
At the same time, business models in the digital economy “are more complex and without borders,” which make “liability harder to apportion and claims more complex to settle,” said the report, titled “Global Claims Review – Liability in Focus.” (To view other claims trends covered by the report, see links below).
“Autonomation is likely to lead to increased product liability for machinery and component manufacturer and software providers in particular,” Allianz continued.
“The risk landscape for companies is constantly shifting with liability risks on the rise globally,” said Alexander Mack, AGCS board member and chief claims officer. “New technologies such as the internet of things, autonomous mobility or 3D printing will create fundamentally new liability scenarios for companies in almost every sector.”
The AGCS report went on to discuss the major technological trends that will influence liability claims:
As an example of how technology is changing existing business models and supply chains, disrupting established lines of liability, the report cited the example of the first 3D-printed drug, an anti-seizure drug for epilepsy, which received approval in 2016 from the U.S. Food & Drug Administration. Such a move, “introduces new liabilities to the traditional pharmaceutical supply chain model, expanding liability beyond doctors and pharmacists to include device manufacturers and software providers,” the report noted.
The policies most affected by the development of 3D printing will be product liability and product recall, with implications for general liability, errors and omissions, directors and officers, workers’ compensation and cyber insurance, the report affirmed.
Peter Oenning, global head of Claims Liability, AGCS, noted that cyber claims are becoming more relevant and consequently is creating a huge area of growth for insurers. Chief Claims Officer Mack compared cyber cover to D&O insurance, which was an exception 20 years ago but is commonly purchased today. “We will see the same trend in cyber, within the next five years,” he said.
*This story ran previously in our sister publican Insurance Journal.