September 23, 2019 by Adam Malik
While it feels like cyber threats have been around for some time, they’re still at the top of the list of emerging and ongoing risks for some industry professionals. But there are others that are grabbing the attention of insurance professionals.
At the recent RIMS Canada Conference in Edmonton, a panel of young insurance professionals – representing the risk, claims, underwriting and broker segments – were asked about what they saw as emerging risk trends by moderator and former RIMS president Lance J. Ewing.
While Julia Hewitt, insurance risk manager at natural gas company Encana, acknowledged the threat of cyber, she highlighted the ongoing threat of terrorism.
“Globally, the rates of terrorism and fatalities due to terrorism are off the charts. It’s one of those that has been around for a long time but it’s definitely in that same vein [of cyber] where it’s expanding, it’s developing and it’s hard to capture what that exposure looks like and how to deal with that risk,” she said.
May Ng, assistant vice president at ESIS Canada, saw catastrophes caused by weather as a big concern, pointing out the recent damage caused by Hurrican Dorian as an example. “Every year, we’re seeing more of it, even forest fires,” she said as part of the ‘Four Under Forty’ panel. “I think that is affecting the industry as a whole.”
Human trafficking was flagged by Ewing as something that might be a little under the radar for some companies. He said there’s been an increase in the area and risk managers need to be aware to make sure their companies aren’t unknowingly involved.
“It’s not just sex trafficking; we’re talking about labour trafficking, too,” he explained. “Those of you who are risk managers, if you outsource your cleaning people in your offices, for example, are you sure they’re not being human trafficked? Do you have statements in your corporate policies related to human-related trafficking? … Is your company ready to put itself out there to say, ‘We don’t do that’?
When it came to cyber, Mitchell Taylor, vice president of client executive at Marsh, and Jacob Snell, assistant vice president and financial lines branch manager at Chubb, both agreed that no one can afford to take their eyes off this ball.
“We’re seeing companies that wouldn’t typically purchase business interruption coverage now being impacted by a cyber claim. Even a contractor out in the field who doesn’t rely on a building, if they can’t bill their customers or pay their employees, that becomes a significant business risk,” Taylor said. “As crime increases in frequency and severity … [cyber risk] is expanding in general and it’s interesting to see carriers adapt to those changing landscapes.”
There are far too many exposures for clients to skip over this important coverage, Snell said. “There is an inherent exposure to personally identifiable information. Those who don’t take the proper steps to proactively put together an incident response plan can potentially find themselves and their executive team in a difficult situation later on.”