April 28, 2022
Cyber risks
It’s Again Time to Worry About Cyber Security
What: Cyberattacks were seen as unlikely threats not too long ago, but their skyrocketing frequency means this risk has become an important and costly part of business coverage. Because cyber threats are always evolving, they are a very dynamic threat that requires risk managers, brokers, and underwriters to constantly be learning and reacting to challenges.
Why it matters: Cyber security is emerging as one of insurance’s dominant risks and will likely be even more pronounced following the pandemic. Every industry is accelerating its migration to the cloud, which introduces security risks. The magnitude of this problem will only increase.
Litigation and social inflation
The Next Asbestos: PFAS
What is PFAS: Per- and polyfluoroalkyl substances (PFAS) are a group of manufactured chemicals commonly used in a variety of consumer products: nonstick cookware, food packaging, stain-resistant fabrics, etc. Because of their wide use, PFAS are also found in the environment, and in the blood of people and animals.
What is happening: The massive footprint of PFAS, which has been in use for over 40 years, means the exposure could be in excess of $100 billion, without factoring in water contamination lawsuits.
Why it matters: There is a growing trend toward funding lawsuits with investment vehicles, which is a step between contingent outcome models for law firms and plaintiff-funded approaches. Based on the size of the potential awards, we expect that the funds available would be quite high for any lawsuit, especially class action suits.
Read: PFAS, Microplastics, Baby Food: Emerging Casualty Risks Keep Coming
Industry Challenge
Tesla Insurance's Growth Continues, Targeting Nationwide Availability by the end of 2022
What: Tesla Insurance is continuing to expand across the US and is targeting nationwide availability by the end of 2022. In the new states of Oregon, Virginia, and Colorado, Tesla Insurance is going to continue doing its own underwriting for the policies.
Why it matters: Putting aside the cost savings on premium, there are a number of gains available on the claims side. With the data available through its cars, Tesla can react in real-time to events and reduce the severity of the loss through impact analysis, adjuster protocols, event recreation, and exploration of the claims process. It is a win-win for everyone that reduces costs dramatically.
Read: Tesla Insurance Adds 3 More States, Plans to be Nationwide This Year
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