Litigation Tops Capital and Nat CAT Concerns
AAIS, a sponsor of the 2022 Florida Insurance Market Summit held March 21st to 23rd, polled attendees pre-event to understand what they perceive as the most pressing issues affecting the Florida market and the overall insurance industry.
Among all survey respondents — which included insurance carriers, reinsurers and insurance service providers — litigation ranked as the most urgent concern. This was followed by reinsurance and capital, natural catastrophes, and regulation. It is notable that at a time when above-average natural catastrophe and extreme weather losses are becoming the norm, it was litigation that topped the list of priorities. This is likely a nod to recent market developments and the recognition that factors including a continued rise in litigation funding and social and economic inflation are poised to drive ongoing increases in litigation frequency and severity.
The second part of the survey focused on data and technology issues, and results made clear that the increased importance of data is weighing heavily on the industry. Data-integrity and accuracy, data security and privacy, and ownership and control of proprietary data all ranked among the top concerns. Overall, reinsurers were most concerned about data integrity and accuracy as well as the accuracy of risk modeling, while data security and privacy was the major issue for carrier respondents, with 65% noting it as a top priority or one they were very concerned about.
Artificial intelligence and machine learning was less noted, perhaps an indicator that the industry needs to get its arms around its core capabilities before fully embracing its advantages — and confronting potential risks — of more advanced technologies. Blockchain initiatives also ranked low, a finding that seems counter-intuitive given the potential blockchain has exhibited for addressing data-related concerns.
The survey, administered by AAIS, sought the views of attendees at the invitation-only 2022 Florida Insurance Market Summit. More than 50 executives responded, with most representing insurance carriers (46%), followed by reinsurers (15%), service providers (15%), and a mix of MGAs and MGUs reinsurance and insurance brokers.