What do you do if your insurance company is facing emerging risks?

Emerging risks lack historical data, hindering traditional insurance methods. 3 approaches are possible: 1) Avoid these risks altogether. That may save a substantial amount of money, but at the cost of losing the new market. 2) Setting highest possible premiums based on expert estimates can collect data to adjust coverage and pricing over time. Can conflict with customer expectations and requires regulatory enforcement, e.g. cyber-insurance. 3) Conduct extensive research on underlying factors and build risk models as well as mitigation techniques to integrate in products. This is a win-win for scenario: faster profits for insurers and higher value for customers plus rapid market growth, providing even more data for product refinement.

Well, let's be sure that we are all on the same page... when we are referring to 'emerging' risks we refer to risks that are new in nature or their natures is differentiating greatly comparted to past experience AND this 'evolution' is occurring gradually over time. Thus we are not referring to 'new risks' changing overnight as eg what happened on September 11 regarding terrorism. So, if we are referring to 'gradually involving risks there is theoretically time to assess. evaluate and prepare...

Updating insurance policies should be an ongoing process and not only in respect top 'emerging' risks as such. Also, and more crucial, underwriting should adopt to cater for such developments. Unfortunately, the insurance market has proven to be too slow in implementing such changes...

Technology is crucial in any level of insurance business. Nevertheless it sounds like a joke to me to discuss about utilizing tech in evolving risks when (most if not all) insurance companies do not even have comprehensive real time risk accumulation assessment tools... risk accumulation is the foundation for any underwriting (and not only) decisions...

Emerging risks are (almost by definition) risks with high loss potential. This means that added support on all levels (know how, capital, worldwide presence and local experience etc) would of course be quite important, especially for smaller players. Another (good) reason for further market consolidation I am afraid - which by definition is NOT a good thing in the long run as insurance is the split or risk amongst many risk carriers and when this (potential) number goes down, the essence of insurance diminishes...

Emerging risks, including climate and cyber risks, necessitate forming partnerships with technical experts for effective underwriting. Establishing smart partnerships with reinsurers and risk management technology specialists, like the syndicates at Lloyd’s of London, is one approach to addressing these challenges.

Emering risks are an "everyday occurance" for an insurance company. If they feel like surprises then that's an existential risk to the company! Trends can be monitored from external sources, by taling with stakehodlers in teh value chain , and be tapping into the insights of staff in your firm. Consider how you build a "hize mind" of the people who listen, observe and think about trends and what they may lead to. Some people are not good at this and don't enjoy it. Others are excellent. Just ensure that this trend monitoring is a structured activity not just intellectual fun.

In today's environment, collaborating with peers across the insurance industry is essential. While certain risks may affect individual companies, many of the challenges we encounter today pose threats to the entire industry. Addressing these challenges will necessitate a united and collective response from all stakeholders within the insurance sector.