Commercial insurance must face up to challenges of fourth industrial revolution to stay relevant
The commercial insurance sector and its customers must face up to the realities of the fourth industrial revolution if it is to remain relevant in five and ten years’ time...
Rapidly changing business models and the advent of cyber-technology are creating completely new risk landscapes and, at the same time, creating unprecedent opportunities and challenges for both insurers and risk managers, he said.
“We’ve been talking for years about the need for insurance to cover risks to intangible assets yet, despite our best efforts, we’ve made very little progress. In some areas, like business interruption, there’s a perception that things have actually gone backwards,” he said.
Ludlow cited a recent statistic that 82% of Fortune 500 companies’ value now resides in intangible assets. “We know that the commercial insurance market is very experienced at protecting physical things like property, but that is not where the future lies for most of its customers,” he said. “Threats to reputation, cyber, supply chains and other intangibles are what really worry them and insurance needs to be able to find solutions. Otherwise it will cease to be central to the risk management of most large companies.
“This is a challenge equally for buyers, especially in the way they use and gather data and understand the wider risk picture in order to use insurance strategically and maintain the interest of the C-Suite. If insurers, brokers and buyers can work together to resolve these challenges – and I am sure we can – then the future will look bright.”
Ludlow was speaking at Airmic’s annual conference, the Future is Now, in Liverpool. The association represents risk managers and insurance buyers in the UK.
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