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The shape of insurance risks continues to shift and expand

The shape of insurance risks continues to shift and...

One of the most challenging areas for risk managers, insurers and regulators alike is identifying and assessing emerging risks that may affect the industry. This is by no means a science. It requires monitoring of global developments and thinking the unimaginable.


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Even when the risk has been identified, its impact can be difficult to quantify, yet it may be significant. In this chapter of the Evolving Insurance Risk and Regulation series we explore the changing risk landscape including new environmental, technological, geo-political, economic and legal developments, as well as the growing interdependencies among them. The more that these risks are evaluated and understood, the better a business can respond. Some examples affecting the insurance industry are obvious (for example, climate change) and others can arise from developments in other sectors (such as autonomous vehicles). Some may appear suddenly (such as the emergence of the Zika virus), while others may slowly evolve over time (for example, the impact of robotics on employment levels). The list is large and continually growing; in this chapter we have outlined some of the key emerging risks for the insurance sector, which all insurers and regulators should be considering.

KPMG insight

We believe that the shift to risk-based regimes enhances the ability of risk managers in the insurance industry to assess both the risk and opportunities associated with these shifts in a more dynamic manner than in the past. The monetary safety net that insurance provides to customers remains valuable. Increasingly, insurers are likely to be seen by their customers as important sources of support and advice as policyholders adjust their businesses.

The ongoing technological revolution continues to create new risks and business opportunities for insurers and their customers. It will be key for risk managers, regulators and insurers to continue to work together to keep on top of this ever-changing environment.

For further reading from the Evolving Insurance Risk and Regulation report, please see:

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