From the Editor's Desk
Beyond the Pandemic, a Gathering Wave of Risks Threatens Insurers With Outsized Losses
This issue includes a look at lawsuits over chemicals that have contaminated drinking water and examines growing concerns about cyberrisks. Other coverage includes a listing of the largest insurers in Latin America.
- Patricia Vowinkel
- April 2021
While each year brings its share of natural catastrophes—hurricanes, earthquakes, wildfires and other storms—risk managers, brokers and insurers spend a lot of time trying to identify new, emerging developments that could turn into the next big loss.
Court cases, new technologies and regulations all have the potential to change the risk landscape for businesses and their insurers. These may not pose much of a threat today, but have the potential to escalate and turn into a much bigger problem a few years down the road.
For years, the industry has had its collective eye on cyberrisk. Cyber has been one of the hottest topics at RIMS conferences in recent years. It may no longer count as a “new” risk, but it certainly is still evolving quickly and has the potential for causing major losses.
In 2020, the big risk was the pandemic. Lloyd's of London reportedly estimated global insured losses on par with 2017 when three Atlantic hurricanes contributed to insured losses of $144 billion.
Many people had expressed concern about the possibility of a pandemic before 2020. The SARS (severe acute respiratory syndrome) outbreak in 2003 gave a preview of the dangers. But even the most savvy would have had a hard time foreseeing the scale and global consequences of not just the virus itself, but the government response and resulting business interruptions and event cancellations.
April is Risk Management Awareness Month. In this issue, Best's Review examines today's risk landscape and sheds light on new and developing risks.
Pollution and environmental risks have been a serious problem for the industry for a long time. Now a new concern is emerging with per- and polyfluoroalkyl substances (PFAS) also known as “forever chemicals.”
“On High Alert: Rising Risks of PFAS Claims and Litigation Capture New Attention” looks at the problem of lawsuits over drinking water contamination from chemicals used in everyday products like cookware and firefighting foam. Litigation currently is focused on environmental cleanup and remediation but could soon extend to product liability and personal injury.
Best's Review looks at some of the new developments on the cyberrisk front in “Insurers Face Evolving Cyberrisk From Costly Hacks, Deepfake Attacks and Sophisticated Ransomware.”
Litigation over board failures related to diversity initiatives is a focus in “D&O Writers Brace for Wave of Costly Diversity Lawsuits.”
Recent catastrophe losses have taken a lot of capital out of the market. In the years after significant losses, new capital often moves in to take advantage of improving rates. It happened in 2002 and again in 2005. At least 16 new and existing insurers in London and Bermuda raised capital in 2020, according to a recent Best's Special Report.
Best's Review spoke with two new reinsurers in “Bermuda's Vantage and Conduit Re Enter Market With Clean Slates and Veteran Staffs.”
The April issue also includes a listing of the largest insurers in Latin America as well as a look at developments in the region.