Despite increased risks and other challenges, insurance firms are ‘stepping up’ to the challenge
Cryptocurrency, the internet of things (IoT), artificial intelligence (AI) and autonomous vehicles (AVs) are among the biggest threats to systemic risk, according to new research from the International Underwriting Association (IUA), published on 9 March 2022.
However, despite these potential technology-based exposures, companies are increasingly providing insurance for these types of risks.
The proportion of firms offering policies for autonomous vehicles, for example, has risen fourfold since the IUA’s previous poll, published in October 2018.
Secretary of the IUA’s Developing Technology Monitoring Group (DTMG) Tom Hughes said: “Emerging technologies can present a real challenge for insurers due to a lack of historic data upon which to base risk assessments.
“The results of our survey, however, show that many firms are stepping up to this challenge, working with clients and technology providers to develop effective solutions.”
A total of 20 IUA member companies were represented in the survey, in addition to one non-member company and one law firm. Of the 20 IUA members, four companies were solely reinsurers.
Regulation and data
The availability of trusted data for risk assessment and public perception of risk were cited as the key obstacles limiting development and adoption of new technologies.
The survey further revealed that few emerging technologies are thought to have effective regulatory frameworks in place to support future use.
Seven out of 10 technologies listed in the research saw less than 30% of respondents agree that regulation is adequate – these included AVs, autonomous vessels, micromobility technology such as e-scooters, AI, cryptocurrency, new digital realities and the IoT.
Around 50% of respondents felt that regulation around unmanned aerial vehicles (UAVs), esports and smart medical devices is adequate.