Riskier world means need for new approach – Hernandez

Insurers have been told that the way they interact with their clients will need to change and the world finds itself in the grip of a new era of risks.

Jake Hernandez, CEO of AnotherDay, the crisis consultancy arm of the broker Gallagher told Emerging Risks that clients were keen to get more form their brokers and insurers and that there was now a huge demand for greater resilience and risk management advice well before the policy was event structured.

“Without doubt the world is a riskier place,” he said. “Both insurers and risk managers are being challenged to deal with new risks and there are two reasons behind this.

“The first is geopolitical risks. We have the ongoing situation in Ukraine, the ongoing conflict in the Middle East and the potential for political unrest around Taiwan.”

The second is the increasing involvement of technology in business. Ten to 12 years ago we saw an explosion in technology and social media has change thing a great deal. It is not highly regulated, and it is creating tensions in a number of areas where there were not tensions before.

“Government have been slow to respond to the risks, and we have to factor, in that in the next 10m years we will see the increasing use of artificial intelligence and that will create new uncertainty.”

Hernandez added the conflicts were putting pressure on the global supply chain but for many businesses they were all too often unaware of just how far their supply chain stretched.

He added that the new risks have created the need for insurers and brokers to look to support their clients in identifying the risks and looking towards risk prevention before the need to respond to a claim.

“The risk market is changing, and we need to ensure that we are with our clients from the outset,” he said.

The threat from state backed cyber-attacks is becoming more real.

“We have seen a rise in the level of sophisticated cyber-attacks driven by the conflict in Ukraine and by the conflict ongoing in the Middle East. Businesses are aware they face a new threat and are keen to see how their brokers and insurers can support their efforts to meet the new risks.”

Hernandez said the demand for the expertise that his operations can deliver has never been greater and the ongoing threats which face the market are unlikely to see that demand diminish which will drive the need for a new approach from brokers and insurers.

“People look at political risks and they see it as the potential for violent conflict,” he explained. “However, it can quiet simply mean that there are economic issues which can cause significant concern and impact to businesses of all sizes.”