climate crisis, vast amounts of data, and expanding digital opportunities are creating
high-stakes environments, raising new threats for insurance companies. How they
respond will establish precedents for their long-term resilience, or otherwise.

us explore how three macrotrends will have a major impact on the world and
insurance, as well as how successful insurers are connecting, predicting,
adapting, and using digital technologies to become constant protectors in their
customers’ lives.

According to Swiss Re’s 2018 report
global insurance premiums exceeded the $5 trillion mark (£4 trillion) for the
first time. While industry’s health seems
constant from afar, environmental, technological, health, and generational
changes are adding challenges for risk assessment. Insurers act fast to meet consumer
expectations, shut protection gaps, and neutralise nascent threats.

the frequency of extreme weather events rise, insured and uninsured losses from
natural catastrophes rise too. Climate change is a core issue for insurers with
implications for governance, strategy, risk management, and operations.

Re reports that, in 2019, natural and man-made disasters were attributed to
global economic losses of around $140 billion. Global insured losses are
estimated at $56 billion (£46bn), leaving a worldwide protection gap of $84
billion ($64bn).

Munich Re have already
warned that climate change could make cover for ordinary people unaffordable,
citing global warming for $24bn (£18bn) worth of losses in the Californian
wildfires. Increases in the intensity and frequency of California’s wildfire
season are predicted by
climate models,
and their analysis combines monthly meteorological data with financial losses
to graph the trend’s rise since 2001.

It is a scenario that has played out again across parts of the UK in February 2020 too, with two severe storms hitting the country and adding to the cost associated with climate change. Economic damage worldwide from flooding last year was $82bn (£67bn), the greatest of any natural peril . Only $13bn (£10bn) was insured.

insurers need to assemble data together from different sources in a serious way,
like MunichRe, and act quickly, if they are to protect community resilience. On
the specific details, in some cases, the costs involved may seem to be too much
steep. However, they must show worried customers and investors they are attacking
causes and effects proactively, by re-considering their partnerships with
existing hydrocarbon partners and safe-guarding communities for generations to

take proliferating amounts of data in the world. As more of the world moves
online, the need for robust cyber insurance and risk management products will
continue to grow to counter the increasing threat from cyber-attacks, data
breaches, and digital warfare.

potential of data to predict
risk and anticipate behaviours is driving new kinds of insurance products that
are responsive, personal, and agile. The rise of usage-based insurance,
micro-insurance, and parametric insurance changes the needs of protection.
According to Acumen
Research and Consulting
, the usage-based insurance market is expected to
grow to $190 billion (£154bn) by 2026, a forecast CAGR of over 29% between

in a digitally connected world, risk is being defined by connected devices
embedded in the important built environment of governments and organisations
everywhere. Business are continuing to collect data on every corner of their
customers’ lives to deliver better products and services. Data is a   valuable commodity at risk of theft.
Insurers’ data protection and cyber defence capabilities are vital to protect consumers and corporations
and maintain their corporate reputations. According to Cybercrime Ventures
, damages from cybercrimes are anticipated to cost businesses and organizations
$6 trillion (£5 trillion) annually by 2021.

and EY
 have published materials on how insurers
can take realistic, manageable actions today to address these threats.

in Britain need to take hold of the data and adjust their prices accordingly.
Britain may have a comparatively easier time of threats in relation to the rest
of the world, but this should not make us complacent. Currently, 5.5m properties
at risk of flooding in England and Wales, or one in six. Major initiatives in
the form of new
of British Flood Reinsurance are already underway though more needs
to be done.

current agreement between the Association of British Insurers (ABI) and
government, the Statement of Principles (SoP),
officially ended on the 30th June 2013, though the new scheme came into
operation by late 2015. Here is a brief table explaining the differences for


the insurance system:
insurance system
flood insurance system (Flood Reinsurance)
risk awareness
knowledge of risks
flood risk
improved public flood
information is part of the
the SoP.
requirements for insurers
share information and
or increase transparency
flood risk in insurance
under the new Memorandum
Understanding the ABI is to
free of charge, a national
of property level flood
by January 2014, and
commits to
of surface water map
combined maps.
capacity for risk reduction through advice on risk reduction measures?
is no requirement but both government and insurers have published advisory
documents and conducted research in this area.
referenced in the scheme, but informal approaches are present through
community resilience capacity building.
financial incentives for policyholders towards mitigation of flood risk with
the SoP does not SET pricing of risks, an aspect of risk reflected in the pricing
has emerged under the SoP.
under Flood Re are intended to be capped for all high-risk households at the
same level, taking over market pricing signals and incentives. Flood Re is designed
to ease the transition to risk-based pricing, prices are controlled.
Encourage resilient
reinstatement techniques
after a flood loss
material is provided by
insurers voluntarily.
incentives for public flood risk management policy
–the government commit to more stringent planning rules as well as for flood
defence investment and maintenance. This is core element of the agreement,
compliance is checked.
– through ‘letter of comfort’ stating government will provide flood risk
management investment and planning policy. No mechanism for checking
compulsory risk reduction
for policy holders, but for government in terms of public flood risk
management policy.
not developing in flood risk areas
by excluding new build (from 2009) from SoP
by excluding new build (from 2009) from Flood Re.


Christophers, B. (2019) The allusive market: insurance of flood risk in neoliberal Britain, Economy and Society, 48:1, 1-29, DOI: 10.1080/03085147.2018.1547494

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Appliance insurance provided by Prominence Support effectively applies a warranty on specific household appliances that you choose to cover under your policy. Your insurance protects you against things going unexpectedly wrong. Should an item break down for no reason, or because the damage has been accidentally caused to it, all the costs – from engineer call outs, labour charges, repairs, parts – will be covered. Even if your items cannot be repaired, we will arrange for a full replacement or a contribution towards the cost of replacing your appliance.
A quick round-up of the main features of our appliance insurance is outlined below:

  • Mechanical and electrical breakdowns
  • Accidental damage
  • No limit to the number of claims
  • Repairs, parts and labour costs
  • Similar specification replacement if we can’t repair it
  • In-house technical assistance
  • A national network of engineers
  • Speedy repairs
  • Cancel anytime
  • Engineer appointments usually within 24 hours
  • Personalised cover level
  • 21 days money-back guarantee
  • FCA Regulated

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