Cyber risk; the prolonging of the Ebola pandemic; and more regulatory and legislative changes are the top three priority risks for UK insurers in 2015, according to an ORIC International and Institute of Risk Management (IRM) joint survey.
The survey not only identified the top emerging risks but looked at both common and innovative emerging risk practices. It asked for the views of ORIC International members, who make up over 70 percent of the UK insurance market, as well as IRM insurance professional members.
Emerging risk was defined by those surveyed as newly developing risks with potential to cause significant business impact that may not yet be sufficiently understood.
There was good news in the survey, finding that both the insurance industry’s maturity of the emerging risk process and board accountability had increased among insurers since 2013. What has not changed is, the perception of emerging risk as less important that other aspects of the enterprise risk management framework. This rating has remained consistent over the past two years.
According to the survey, the top ten emerging risks for insurers in UK are:
1. Cyber Risk
2. Pandemic – Ebola
3. Further regulatory or legislative change
4. Eurozone collapse/ UK withdrawal from the EU
5. Terrorist attack
6. Significant changes in broker power/ distribution chains/ broker communities
7. Shift in affluence to emerging markets i.e. South East Asia
8. Climate change including solar weather
9. Global political instability
10. Technological advances.
