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WSIA Panel Identifies Cyber, Online Merchants and Autonomous Vehicles as Key Emerging Risks

Attendees at the Wholesale & Specialty Insurance Association’s Annual Marketplace said the E&S sector is experiencing new capital and entities at a rapid pace.
  • John Weber
  • January 2022
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Often called the safety valve of the insurance industry, surplus lines often fill the coverage voids that the standard market cannot. Emerging risk is what surplus lines are all about.

AM Best TV spoke with several industry experts for a panel discussion on emerging risk at the Wholesale & Specialty Insurance Association's Annual Marketplace in San Diego. The panel included Carol Laufer, senior vice president, head of liability, Allianz Global Corporate and Specialty; Heather Schenker, vice president for P&C programs, Nationwide; and Brenda (Ballard) Austenfeld, managing director, RT Specialty, and president of RT Specialty's National Property Practice.

Following is an excerpt of the interview.

Related: Cyberattacks: Insurers Defend Against Ransomware

Where is the opportunity coming from over the next few years?

Laufer: I would certainly start with cybersecurity. That's a growing field. It's being looked into as it changes every day.

In addition, I'm interested in smaller business, which is similar to the niche businesses in that there's all of these online sellers selling products. How are they going to get insurance for their products?

While vehicles are not completely automated yet—and that's not in the near term—what is in the near term are certain aspects of vehicles that are becoming automated. Where is that insurance going to sit? Is it going to sit with individual auto insurance or is it going to become products liability insurance?

In the very near future, I'm keeping my eyes on those three areas.

Schenker: I would echo exactly what Carol had to say there. Cyber's been the hardest market that we've seen. Carriers are getting 100%, 200% rate on cyberrisks. I don't even think we fully understand what a cyber event could truly be. We've seen some glimpses of it, but we don't know what that's going to look like in the future.

You talk about autonomous vehicles; that could also be a cyber event. You think about hacking vehicles. But what we're seeing right now, if you look out here—I read an article this morning that there are container ships lined up from LA to San Diego. That is because they can't even get those container ships out of port and get everything off of those.

I do think autonomous vehicles, probably trucks, are going to be the first thing that we're going to start to see on the roadway, just to deal with the changing economy.

I think another thing that's going to be interesting is going to be parametrics, as the climate is changing and we are starting to see more and more weather events. How are we going to address those weather events in the future? That's where parametrics could be really interesting, as far as how they resolve some of those issues.

Related: Maturing Auto Insurtech Segment Looks to Highlight Shopping Options, Education to Grow

(Ballard) Austenfeld: I like to say, “In today's world, what is now the definition of catastrophic loss?” Back in the day, it was literally just earthquake or hurricane.

In today's world, we now have flooding, tornadoes that we've always had, too—but the intensity level—wildfires, and even rioting. Segments in areas that we never would have anticipated. Yet, I believe the severity piece of that is really what's driving the different view from carriers and the buyers of insurance.


John Weber is a senior associate editor. He can be reached at john.weber@ambest.com.



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