Special report: 2017 risks
Article, Reactions Magazine – December 2016
What are the big risks that will hit the re/insurance industry in 2017? Reactions asked some of the global re/insurance industry's senior figures.
As appeared in Reactions Magazine, December 21, 2016.
By: Angela MacPhee
Disruption was a word we heard a great deal of in 2016, and it will be used even more frequently in 2017. As a forensic accounting firm to the insurance, legal and corporate markets, RGL sees thousands of claims each year, giving us unique perspective of the cost of global risks and disruption factors.
Topping the list of disruptors is cyber and the reputational damage we have seen caused by leaked emails and private information exposed. The cost of cyber risks will become increasingly complex and companies will demand coverage extending beyond breach response to cover reputational damage and loss of business.
The same holds true with product recall. With cases like Samsung, Chipotle and Sabra, companies will focus on how product recall and contamination coverage will not only help with expenses and class action lawsuits, but also protect their brands from reputational harm.
Complicating the environment for large global losses are potential changes to the supply chain and our global economy. The recent passage of Brexit and the new US administration has created a general uneasiness of what will happen next for cross‐border commerce and regulation.
There is potential for more natural disasters in 2017, possibly an earthquake, with tsunamis and volcanic eruptions that can often follow even more devastating. About 90% of earthquakes happen along the Ring of Fire, a horseshoe shaped region in the Pacific Ocean encompassing several large seaports and important trade routes. The question is not if it will happen, but when.
Lastly, we have recently expanded in Latin America, which is particularly vulnerable to natural disasters. We hope to see more education about what insurance products are available companies in and moving to Latin America.
This is certainly a changing picture of global risk. Fasten your seatbelt.