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3. Emerging Risks for Insurers

3. Emerging Risks for Insurers. Andrea French Technical Specialist, Insurance Sector Team. 3.1 Definition of an emerging risks . An emerging risk can be defined as:

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3. Emerging Risks for Insurers

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  1. 3. Emerging Risks for Insurers Andrea French Technical Specialist, Insurance Sector Team

  2. 3.1 Definition of an emerging risks An emerging risk can be defined as: "an issue that is perceived to be potentially significant but which may not be fully understood or allowed for in insurance terms and conditions, pricing, reserving or capital setting". (Source: Lloyd’s of London) Emerging Risks

  3. 3.2 Key drivers of risk The key drivers of risk include: Economic, technological, environmental and socio-political developments as well as the interdependencies between them. Other risk drivers can include: The changing business environment, such as liability issues, evolving regulatory regimes, stakeholder expectations, and shifts in risk perception. Emerging Risks

  4. 3.3 Insurance-specific risks This presentation will concentrate on the insurable areas of risk for both life and general insurers. These risks include: Life Products Risk (credit & counterparties, impact of the low interest rate environment, enhanced annuities and retail distribution review & platforms) General Insurance (GI) Risk (impact of the low interest rate environment, inadequate reserving, UK flooding and periodic payment orders) Technology Risk (cyber attacks) Stakeholder Risk (shadow banking activities) Black Swan Risks (combined effect of financial, catastrophe & pandemic) Emerging Risks

  5. 3.4 Life Emerging Risks Financial risks - Credit and counterparties Emerging Risks

  6. 3.4 Life Emerging Risks Financial risks - Low interest rate environment impact Emerging Risks

  7. Product Risks – Enhanced annuities 3.4 Life Emerging Risks Emerging Risks

  8. Product risk – Platforms and Retail Distribution Review 3.4 Life Emerging Risks Emerging Risks

  9. 3.4 GI Emerging Risks Financial risks - Low interest rate environment impact Emerging Risks

  10. 3.4 GI Emerging Risks GI line of business risk – Inadequate reserving Emerging Risks

  11. GI line of business risk - UK flooding 3.4 GI Emerging Risks Emerging Risks

  12. GI line of business risk - Periodic Payment Orders (PPOs) 3.4 GI Emerging Risks Emerging Risks

  13. 3.4 Life and GI Emerging Risks Technology risk - Cyber attacks Emerging Risks

  14. Stakeholder risk - Shadow banking activities 3.4 Life and GI Emerging Risks Emerging Risks

  15. Black Swan - Combined effect of a financial, catastrophe & pandemic events 3.4 Life and GI Emerging Risks Emerging Risks

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