With climate change risks increasing, construction costs surging, and property insurance rates rising, it’s in everyone’s best interest to manage property risks. The good news is advancements in technology are providing new tools that property and business owners can leverage to prevent property damage.

Losses Are Increasing

According to the European Environment Agency, weather- and climate-related extremes have become more severe and more frequent across Europe and the rest of the world. Between 2009 and 2022, economic losses increased by 2.5% a year, resulting in a cumulative increase of 41%.

Inflation has also driven property losses higher. In the UK, the Consumer Price Index increased by 4.7% in October 2023 and by 6.3% in September 2023. These inflation hikes are down compared to a year ago – comparatively, in October 2022, the Consumer Price Index increased by 9.6%. Despite the moderation, prices remain high. As a result, insurance claims are more costly.

The overall impact on claims costs has affected the property insurance market. According to EY, the UK home insurance market reported the worst performance on record in 2022, with major weather events, increased claims frequency, supply chain issues, and high inflation cited as key reasons. Policyholders can expect their premiums to rise by 36% over the next two years for these same reasons. Meanwhile, Fitch Ratings says global reinsurers are cutting back on coverage for medium-sized natural catastrophe risks.

Property Risk Mitigation Is Critical

Risk mitigation is always beneficial, but it’s especially important amid rising property costs. As insurers raise their prices and reduce their exposures, property owners will face greater challenges securing affordable policies that provide adequate coverage.

If policyholders implement proactive risk management strategies to reduce the chance of a claim, they may make themselves more attractive to insurers. At the very least, they’ll be better positioned to keep their claims under control. Below are a few ways technology can help.

Drones Can Catch Problems Before They Become Worse

Some areas of properties are difficult to see, which makes it challenging to determine whether there are maintenance issues that require attention. Drones can go where people cannot, enabling owners to monitor their properties more easily – all without putting workers in physical danger. For example, CTL Engineer says drones can conduct faster, cheaper, and safer building inspections and spot signs of leaks or wear. This is especially useful for high-rise buildings.

Drones are also useful for monitoring sites for security risks. Construction sites are a prime example because they are susceptible to vandalism and theft. Drone DJ says the cost of theft from building projects is as high as $1 billion a year. Drones are helping to mitigate this risk by catching thieves.

Smart Leak Sensors

Water damage can be costly. When leaks aren’t caught quickly, the costs can add up – even if the leaks are relatively small. UK Leak Detection estimates that a leak affecting a kitchen and tiled walls could cost £10,000 to repair.

Smart leak sensors can detect leaks before damage occurs. A study looking at homes with the Flo by Moen Smart Water Shutoff and found a 96% decrease in the number of paid water damage claims. During the same time period, the control group (homes without the smart leak detector) saw a 10% increase in paid water claims.

Other Smart Devices

In addition to smart leak sensors, a number of smart devices can help property owners and businesses manage their risks and prevent losses.

• Smart sprinkler systems can put out fires. According to A-1 Fire & Security Equipment, smart sprinklers extinguish fires faster than conventional sprinkler systems while using less water, therefore reducing water damage.
• Smart security systems can protect property from crime. By leveraging surveillance, alarms, intercoms, and access control, smart security systems add a critical layer of security.
• Freeze detectors prevent water damage. USA Today reports that freeze detectors can tell you when low temperatures are putting pipes at risk of bursting. This gives property owners time to take action to prevent damage.

The current property market is challenging. Encourage your clients to use technology to bolster their risk management strategies. If you have a challenging coverage issue, Costero Brokers can help you explore options to secure property insurance for your clients. Contact us.

The nature of warfare is always changing. One of the most recent developments involves the use of cyberattacks by government-sponsored actors. These attacks lead to the question: when is a cyberattack an act of war? And, perhaps more importantly for many businesses, when is a cyberattack ineligible for insurance coverage due to war exclusions?

State-Sponsored Cyberattacks

Not all hackers are lone criminals working in secret to make a quick profit or take down their enemies – some criminal groups are backed by governments.

According to Strategic Risk, state-sponsored cyberattacks typically aim to commit espionage, disrupt services, or identify and exploit vulnerabilities in national infrastructure. However, attacks may also seek monetary gain to fund future attacks by targeting customer data from private businesses. Russia and China are behind most state-sponsored cyberattacks, but the North Korean and Iranian governments are also known to sponsor attacks.

Several well-known attacks have been linked to government-sponsored groups, including the WannaCry ransomware attack that disrupted NHS facilities in the UK along with many other organizations around the world. According to the Council on Foreign Relations, the US, the UK, Australia, Canada, and Japan issued statements accusing North Korea of being behind the 2017 attack. In 2018, the U.S. Department of Justice announced criminal charges that alleged North Korean entities were responsible.

State-Sponsored Cyberattacks and the War in Ukraine

State-sponsored cyberattacks often increase during times of war. This appears to be the case with the war in Ukraine.

The National Cyber Security Centre says Russia appears to be behind a series of cyberattacks that started at the same time as the invasion of Ukraine. One such attack was against Viasat, a commercial communications company. Although the attack targeted the Ukrainian military, it impacted personal and commercial users as well as wind farms in central Europe.

According to a report from Google’s Threat Analysis Group, Russian government-backed attackers have launched an aggressive and multipronged cyber campaign that includes an increase in spear-phishing to target NATO countries. The report predicts with high confidence that Russian attacks will continue against Ukraine and NATO partners.

Labeling Cyberattacks as Acts of War

Although some cyberattacks are sponsored by government entities – and an increase in cyberattacks may even be associated with a declared war – identifying cyberattacks as acts of war is not always simple.

One issue is that the source of the attack may not be immediately known. Other issues involve definitions of what counts as an act of war. These definitions have evolved in recent years as cyberattacks have become a greater threat. In 2010, NATO officially recognized that cyberattacks could reach a threshold that threatens national and Euro-Atlantic prosperity, security, and stability. In 2014, NATO endorsed a new cyber defence policy that means a cyberattack could be grounds to invoke Article 5 of NATO’s founding treaty.

State-Sponsored Cyberattacks and Insurance Coverage

Determining whether a cyberattack counts as an act of war may have significant geopolitical implications. It can also impact insurance coverage.

As Investopedia explains, a war exclusion clause in insurance policies excludes coverage for damages related to war or similar activities. Standard insurance policies commonly include war exclusions because insurers might be unable to remain solvent if they have to pay for thousands or millions of claims associated with largescale war. Organizations that need war coverage may be able to purchase a standalone policy.

War exclusions aren’t limited to property and business interruption policies. According to Dark Reading, cyber insurance policies also typically include war exclusions. Insurers have used these exclusions to deny coverage, such as when companies filed claims for NotPetya malware. According to the Brookings Institution, the NotPetya attack has been blamed on Russia and is believed to be part of the conflict between Russia and Ukraine, although its impact spread beyond the region.

The New Lloyd’s Cyber War Exclusion

Lloyd’s of London has new requirements for state-backed cyberattack exclusions in standalone cyberattack policies. Among other things, the new requirements say standalone cyber policies must exclude losses arising from war, regardless of whether the war is declared. Policies must also provide clear definitions of all key terms. Insurers must include the new cyber war exclusions in new policies and renewals from March 31, 2023.

According to Insurance Journal, the introduction of the new cyber war exclusion was met with criticism and confusion. S&P Global says some insurance buyers are even questioning the value of cyber insurance in light of the new exclusions. However, Insurance Journal notes that the most commonly-used cyber war exclusion does not exclude state-sponsored attacks unless certain requirements are met, including that the insured digital assets are located in a state that has experienced a major detrimental attack.

Securing Cyber Insurance

Since many cyberattacks are state-sponsored, it’s important to understand how a particular cyber insurance policy will treat such attacks. The bad news is policies may exclude attacks that can be considered acts of war. The good news is cyber insurance policies are starting to define these terms more clearly to ensure policyholders know what their policies cover and can avoid lengthy legal disputes.

Do you need help securing cyber insurance for your clients? Costero Brokers offers creative solutions to help you solve your clients’ coverage challenges. Contact us.

Crime is a major loss driver for many businesses, but many standard insurance policies do not adequately cover crime. As crime rates are increasing, brokers need to work with their clients to understand coverage gaps, manage risks, and secure appropriate crime insurance.

Overall Crime Levels in the UK

Recent figures show that crime is on the rise in the UK.

According to the Crime Outcomes in England and Wales 2022 to 2023, police-recorded crime levels for most crime types have increased. Total offences (excluding fraud and computer misuse) were up by 5% compared to the previous 12 months, which represents an additional 5.5 million offences. Although crime levels decreased at the start of the COVID-19 pandemic, they have since risen and are now 5% higher than before the pandemic.

The report shows there was an even larger surge in fraud offences, increasing from 976,093 in the year ending in March 2022 to 1,125,168 in the year ending in March 2023. This represents an increase of 15%.

Businesses are often the targets of these crimes. The 2022 Commercial Victimization Survey found that 28% of business premises in England and Wales had experienced a crime in the previous 12 months: 15% experienced theft, 9% experienced burglary, 9% experienced vandalism, and 7% experienced assaults or threats.

Emerging and Evolving Risks

Aided by new technologies and shaped by social issues, the nature of crime continues to evolve.

• Retail Theft: Retail theft is a growing problem. The British Retail Consortium says retail theft increased by 27% in 10 of the largest cities in the UK, although some cities saw surges of up to 68%. Criminals are also becoming bolder: incidents of violence and abuse against retail employees have nearly doubled from pre-pandemic levels.
• Social Engineering Scams: In social engineering scams, criminals attempt to manipulate individuals. Common examples include phishing and business email compromise scams. The National Economic Crime Centre says business email compromise (also called payment diversion fraud) cost the UK economy approximately £152 million in the year ending September 2021. There is also a concern that new AI-powered tools will result in more convincing social engineering attempts. In one alarming case, Gizmodo reports that a man in China lost 4.3 million Yuan after a scammer used deepfake software to impersonate his friend’s face and voice.
• Cyberattacks: The 2022 Cyber Security Breaches Survey found that 39% of UK businesses had experienced some sort of cyberattack in the previous 12 months, including phishing, denial of service, malware, and ransomware. Of the businesses reporting a cyberattack, 31% were attacked at least once a week and 20% reported a negative outcome.

Reviewing Your Crime Coverage

Businesses can protect themselves from crime by implementing good risk management policies – from on-premises security to cyber awareness training. However, some risk of crime will always remain. Therefore, insurance is another important element of any risk management program.

A commercial property insurance policy may provide coverage for some types of crime, such as vandalism and burglary. However, it may exclude many other types of crime, including employee crime, fraud, cybercrime, and kidnapping. Businesses can obtain additional coverage under other insurance policies, such as fidelity guarantee, crime, cyber liability, and kidnap and ransom insurance.

When reviewing insurance coverage for crime, determine if your clients have coverage for:

• Property crimes committed by third parties. Consider the limits and whether your policy excludes any specific types of losses.
• Social engineering crimes and fraud. A single instance of payment diversion fraud can result in major losses. Businesses are often unable to recover any funds they send.
• Fraud committed by employees or disgruntled former employees. Employees often have access to company accounts and assets. Many cases of fraud and theft are committed by someone in the company.
• Ransomware and other cyberattacks. Determine what losses your policy covers, such as business interruption losses, system recovery costs, forensic investigations, regulatory fines, and ransom demands.
• Kidnapping and ransom of employees who do business abroad. If executives are traveling to countries where kidnapping is a known risk, you should consider this coverage.

Do you need help securing crime insurance for your clients? Costero Brokers offers creative solutions for your coverage challenges. Contact us.

Electric vehicle sales are surging, but electric vehicle owners may have an unpleasant surprise awaiting them when they try to purchase motor insurance: insuring electric vehicles tends to be much more expensive than insuring petrol and diesel vehicles. Some insurers even refuse to offer coverage.

The Rise of Electric Vehicles

Electric vehicles have enjoyed increased popularity as motorists look for more environmentally-friendly alternatives to petrol cars. Carmakers have also been investing heavily in electric vehicles in response to looming regulations. According to Reuters, the UK was scheduled to impose a ban on the sale of new petrol and diesel vehicles beginning in 2030. This ban has now been pushed back to 2035, a decision that has frustrated carmakers.

Despite the delay, electric vehicle sales are surging. According to CleanTechnica, plug-in electric vehicles claimed 23.1% of the UK passenger auto market in May 2023, up from 18.3% a year prior. The Tesla Model Y was the best-selling battery electric vehicle (BEV), reaching 2,509 sales in May.

Businesses are also investing in electric fleets. According to Precedence Research, the global electric truck market is expected to grow from $2.00 billion in 2022 to $20.25 billion in 2032. In the UK, Transport & Environment says electric trucks will soon be less expensive to own and run than diesel trucks. As a result, battery electric trucks could become common sooner than previously anticipated.

Motor Insurance Costs

Car insurance costs have been on the rise in recent years. Electric vehicle owners are seeing especially high costs.

According to the Association of British Insurers, the cost of fully comprehensive coverage in the UK climbed to £511 in the second quarter of 2023, up 7% compared to the previous quarter. Drivers who renewed their insurance paid an average of £36 more.

Electric vehicle owners can expect to pay even higher amounts. According to The Guardian, one Tesla Model Y owner saw annual costs skyrocket from £1,200 to more than £5,000, with some insurers flat out refusing to offer coverage. Other Tesla owners have shared similar complaints in online forums, reporting premium hikes of anywhere from 60% to 940%.

Causes Behind Premium Hikes

Insurers are raising premiums in response to their own growing losses. According to EY, UK motor insurers reported a net combined ratio of 109.5% in 2022 – a number that indicates a loss. With an expected net combined ratio of 108.5%, 2023 is unlikely to see much of an improvement.

High inflation is a key factor behind falling underwriting profitability. According to a report in the House of Commons Library, UK inflation reached a peak of 11.1% in October 2022. Inflation has since fallen, reaching 6.7% in September 2023.

Nevertheless, higher prices have already impacted claims costs. The Association of British Insurers says the cost of vehicle repairs increased by 33% between the first quarter of 2022 and the first quarter of 2023, with both labour and replacement part costs seeing significant hikes.

Rising repair costs are impacting all vehicles, but electric vehicles can be especially pricey to repair. According to The Guardian, analysts have put the claims costs for electric vehicles at 25% higher than those for petrol vehicles.

Business Insider explains that electric vehicles have fewer maintenance costs because they don’t need oil changes and have fewer moving parts. However, when repairs are needed, they are often expensive. Even new tyres may be more costly because they have to be able to handle heavier loads and faster acceleration.

In particular, though, damage to batteries can be a major cost. According to Reuters, battery packs account for approximately half an electric vehicle’s costs. Furthermore, it is often impossible to repair battery packs that have been damaged in crashes, even if the damage is minor. As a result, insurers sometimes have to write off such vehicles as a total loss.

Securing Insurance for Electric Vehicles

As electric vehicle sales surge, brokers can expect to encounter a higher volume of clients looking for insurance for their electric vehicles.

• Prepare clients for the increased insurance costs. High motor insurance costs are a reality for everyone right now, but the costs are particularly steep for electric vehicles. Drivers should build this cost into their budgets when deciding whether to buy electric vehicles.
• Anticipate difficulties with finding affordable coverage. Since some insurers are refusing to cover certain electric vehicles, obtaining coverage may be more difficult than usual.

Do you need help finding coverage for clients with electric vehicles? Costero Brokers can help you find coverage for hard-to-place risks. Contact us.

Rising losses from natural catastrophes threaten both insurers and policyholders. Brokers are caught in the middle, having to explain premium price hikes while helping their clients secure coverage. Since the situation is likely to become worse, it is necessary to take action now to mitigate the growing risk of natural catastrophes.

The Surge in Natural Catastrophe Losses

The World Meteorological Organization says weather-related disasters have increased over the past 50 years. The good news is the number of deaths has decreased; the bad news is the amount of damage has increased. The United Nations says economic losses increased seven-fold – from an average of $49 million per day in the 1970s to an average of $384 million per day in the 2010s.

Although climate change is often identified as the culprit, the Yale School of the Environment points out that other causes may also be responsible for rising losses. Climate change is increasing the number and severity of hazards, but severe losses are extra likely to occur when hazards overlap with vulnerabilities, such as poor forest management and unplanned urbanization.

The Impact on Insurance

Swiss Re says global insured losses from natural catastrophes reached $50 billion in the first half of 2023 and losses have been increasing by around 5% to 7% a year. Compared to the 10-year average, insured losses for natural catastrophes were up by 54%.
Reinsurers, which help insurers transfer risk, have been especially hard hit by the rise in natural catastrophe losses. In response to declining profitability, Moody’s says reinsurers have raised rates for primary insurers. Insurers and reinsurers are also reassessing risk and, in some cases, reducing the amount of coverage they write in high-risk areas.

The Role of Insurance in Building Climate Resilience

As natural catastrophe losses continue to mount, insurers need a proactive and multi-pronged approach to take control of climate risks and reduce losses.
In 2021, the Bank of England published a Climate Change Adaptation Report that looked at the capabilities of banks and insurers in terms of mitigating climate change risks. The report identified uncertainty over whether banks and insurers are sufficiently capitalized for future losses. The report also determined that risk-management controls can reduce the capital needed for resilience in the future.

According to McKinsey & Company , insurers can do more to mitigate risk. For example, they can work with customers to adapt to climate change with more resilient infrastructures, facilities, and supply chains. Insurers can also develop new products and underwriting solutions as new hazards emerge.

Helping Policyholders Navigate Rising Losses

Whereas insurers work on long-term goals, policyholders often have more immediate concerns. They need to secure adequate coverage for their properties and businesses. With rising rates and tighter underwriting, that’s becoming increasingly difficult.

Brokers play a vital role in helping clients navigate this challenging environment. They need to:

• Embrace transparency. Rising prices could catch policyholders off guard. Brokers can minimize the surprise and help policyholders prepare by prioritizing communication and education. Don’t wait until a policyholder complains about a pricey renewal – stay in contact with clients and help them understand what’s happening, both in terms of insurance underwriting practices and their own personal level of risk.
• Explore coverage options. As it becomes more challenging to secure adequate coverage, brokers may need to get creative. This could involve layering coverage or adding a parametric insurance policy to conventional coverage.
• Promote proactive risk management. As risks increase, insurers will continue to tighten their underwriting and require policyholders to play a more active role in risk mitigation. Policyholders can make themselves more attractive to insurers while reducing their chance of a loss by implementing loss control measures. These could be anything from using smart water leak sensors to making building upgrades. For commercial clients, business practices also require attention. For example, diversification of the supply chain could reduce the risk of business disruption after a natural disaster.
• Encourage adequate insurance coverage. Although insured losses are rising, many natural catastrophe risks remain uninsured. According to Swiss Re, global catastrophes led to $129 billion in economic losses in 2022, but only $52 billion of these losses were insured. As insurance rates rise in response to growing risks, more people may opt to go without coverage. However, this could expose them to greater risks and costs.

Are you encountering challenges securing coverage for your clients? Costero Brokers offers creative solutions to help solve your clients’ coverage conundrums. Contact us.

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Insurers have been reducing coverages, increasing rates, and in some cases, pulling out of difficult and unprofitable markets. As a result, some policyholders are receiving notices of nonrenewal, and many are having trouble securing the coverage they need at a rate they can afford. This puts business owners, homeowners and the brokers who serve them in a difficult position, but even in this difficult market, there are insurance solutions that can help.

Pressure in the Insurance Market

Insurers have faced rising losses from a number of causes, including natural disasters and cyberattacks. At the same time, inflation has impacted insurance carriers just as it has impacted businesses and individuals. High inflation rates, rising labor costs and supply chain disruption have caused claim costs to increase, resulting in higher costs.

These factors have impacted profitability. AM Best says the U.S. property and casualty insurance sector experienced a net underwriting loss of $26.5 billion in 2022. Even though net earned premiums increased during the year, various factors, including the impact of Hurricane Ian, resulted in significant losses.

Meanwhile, Insurance Journal says global property catastrophe reinsurance rates increased by 37% on average during the renewals on January 1, 2023, which is the biggest year-over-year increase since 1992. Insurance carriers rely on reinsurance to offset catastrophic losses, so the massive increase in reinsurance costs will likely impact their ability to take on risk. This in turn will impact the individuals and businesses who need coverage.

Faced with rising costs and a lack of profitability, some insurers are deciding to stop writing at all in highly catastrophe-exposed areas and even entire states, particularly California and Florida.
In California, both State Farm and Allstate recently announced that they were pulling out of the property market. According to AP News, State Farm cited inflation, a challenging reinsurance market and increasing catastrophe exposures as reasons for deciding not to write commercial or personal property and casualty insurance in California.

Where Does This Leave Policyholders?

As insurers flee high risks, some policyholders are receiving notices of nonrenewal. Additionally, the exit of these insurers means there are fewer options for policyholders looking for coverage, whether it’s first-time coverage or a replacement for a policy that was not renewed. Insurance applicants may also face higher rates, lower limits and more restrictive coverage.
Finding suitable coverage is becoming more challenging, especially for accounts in high-risk areas or with an undesirable claims history.

In some regions, the situation is reaching crisis levels. The Guardian says the lack of property insurance options in Florida is making home ownership unaffordable, and one retiree told the publication that she may have to sell and move out of state if her premiums go up any further.

Creative Coverage Solutions

For the most difficult-to-place accounts, brokers may need to think outside of the box.

• Collaborate with a global partner. Because their underwriting exposure is spread over a broader area, and they don’t write as much business in a given state, global partners may have more flexibility than an insurer with a heavy presence in a given state. In London we have markets who are still able to quote wind in Florida, where they manage their Catastrophe aggregates.
• Consider unconventional insurance alternatives. If there is no coverage available in the traditional insurance market, you may need to look at non-traditional options, including parametric insurance and non-admitted carriers.
• Layer insurance coverages. You may not be able to place all your risks with one carrier and keep rates affordable. Instead, consider layering coverage, using both conventional and unconventional options. For example, you can use a parametric solution to cover some of the wildfire risk and catastrophe risk, and then secure traditional insurance coverage on top of the parametric policy. We have seen success in helping clients secure wildfire and wind coverage in cases where these exposures are excluded by traditional all risk policies. For example, we have been able to provide a wildfire only parametric policy for a California college and other real estate clients that were unable to get wildfire coverage through conventional markets.
• Go for a high deductible. Policyholders may need to take on some of the risk themselves in the form of a high deductible. Remind them that they will need to have the funds to cover the deducible in the case of a claim. We have been seeing a trend of higher retentions to help keep the premium costs manageable for the client and to remove the attritional loss history of the client.

If you’re having trouble placing accounts in the U.S. or the Caribbean, Costero can help you find creative insurance solutions.

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As traditional farming faces challenges posed by land constraints, climate change, and resource scarcity, indoor farming continues to emerge as a viable solution to meet the global demands for sustainable food production. With advancements in technology, indoor farming is poised for remarkable growth, necessitating innovative insurance solutions to mitigate risks and ensure the long-term success of this sector.

Indoor farming, also known as vertical farming or controlled environment agriculture, involves the cultivation of crops in optimised indoor environments, using hydroponics, aeroponics, and artificial lighting. This method enables year-round cultivation, eliminating dependence on weather patterns and reducing the need for chemical pesticides or excessive water usage. The potential of indoor farming extends far beyond traditional agriculture, allowing for the cultivation of high-value and exotic crops, including leafy greens, herbs, fruits, and even medicinal plants.

The future of indoor farming is promising. The global market was valued at $34.2 million in 2022, and is expected to expand at a compound annual growth rate (CAGR) of 12.9% to reach $88.5 million by 2030, driven by factors such as rising urbanisation, increasing consumer demand for fresh produce, and advancements in farming technologies (Grand View Research). As this sector expands, insurance providers must anticipate and adapt to the unique risks associated with indoor farming operations.

Insurance will play a pivotal role in enabling the sustained growth and resilience of the industry. With the intricacies of indoor farming systems, insurance coverage tailored specifically for this sector is imperative. Policies will need to address a range of potential risks, including equipment breakdowns, crop failures, contamination incidents, and energy supply disruptions.

Innovative insurance products will empower indoor farmers by offering comprehensive coverage, risk management tools, and specialised support. These solutions will not only protect the investments of indoor farmers but also foster investor confidence and encourage further expansion in the industry.

Insurers must proactively collaborate with industry stakeholders, leveraging data-driven insights and risk assessment models to develop customised policies that cater to the evolving needs of indoor farming operations. As this sector expands, crop and agriculture specialists must anticipate and adapt the unique risks associated with indoor farming operations.

The advancement of digital assets means even more new opportunities for insurers. Non-fungible Tokens are still in their early days, but NFT insurance is an emerging sector with some inherent risks unique to their nature.

Some NFTs are stored exclusively on a blockchain, making them immutable and impossible to replicate. These assets encompass anything from artwork to music, collectibles, and even virtual real estate. Insurers must provide more advanced coverage against theft, damage, and loss as NFTs continue to grow in popularity and value.

The ownership and transfer of NFTs pose their own unique challenges. If a person purchases an NFT, but the original creator disputes ownership, an insurance policy can help protect the buyer’s investment.

There’s a growing trend toward meeting demands in the sector of NFT insurance, but stringent laws and regulations will need to be enacted for it to become profitable. By 2030, insurance companies should further collaborate with fine art, specie, tech and cyber and property specialists to further protect against the risks associated with digital assets.

The evolution of autonomous vehicles like self-driving cars and e-scooters is set to revolutionise the insurance industry, reducing claims, fraud, and premiums. But they also introduce new opportunities for insurance products. Insurance brokers already offer tailored insurance products designed explicitly for micro-mobility companies. These products include third-party liability coverage, personal accident coverage, and other types of coverage to address the unique risks associated with scooter programs and autonomous vehicles. Still, the subject of liability will only get more complex as automation advances.

The Society of Automotive Engineers has developed a classification system consisting of five levels of autonomy, ranging from Level 0 (no automation) to Level5 (full automation). Insurers can use traditional risk assessment methods for lower levels of autonomy, where human drivers retain control. However, the risks become more compounded as technology moves towards higher levels of autonomy. According to industry experts, fully automated self-driving cars are expected to be available by 2035. At this stage, the risks associated with driving will shift from driver error to technical failure, requiring insurers to reassess their risk models and adopt new approaches. New insurance products for autonomous vehicles may include cyber-attack coverage, software malfunctions, and sensor failures. By 2030, insurance companies will have had to partner with technology companies to provide risk management solutions, such as data monitoring and analysis, to better understand and mitigate risks associated with autonomous vehicles.

Autonomous vehicles are transforming many industries. US futurist Thomas Frey predicts 1 billion unmanned vehicles to be in circulation by 2030 (World of Drones Congress). This doesn’t mean drones will be flying everywhere, but fleets of autonomous vehicles, including autonomous robots, could be operating in every city. Autonomous robots are self-operating systems that perform tasks without human intervention. They make independent decisions and execute actions based on their programming and sensors. They can be used for assembly, inventory management, crop monitoring, patient care, exploration, customer service, security patrols, and transportation services. Autonomous robots make healthcare, business, and travel more efficient.

However, automation always comes with risk. Accidents will inevitably occur due to unforeseen causes and malfunctions. While accidents caused by human negligence and reckless behavior in industries where robots replace humans will likely decrease, new vulnerabilities will arise. For example, the extensive use of sensors and connections in all types of autonomous vehicles raises concerns about their cybersecurity and susceptibility to remote attacks. Also, if a malfunction were to occur, the question of fault (manufacturer vs operator) causes issues for insurers.

The Autonomous Robot Market is projected to achieve a Compound Annual Growth Rate (CAGR) of 19.70% and reach a value of $11,607.13 million by the year 2030 (DataBridge). By 2030, autonomous robots will demonstrate higher levels of intelligence. Their sensing, perception, and decision-making capabilities will all advance, enabling them to perform complex tasks with minimal human intervention. With enhanced AI capabilities such as machine learning and computer vision, these robots will find more applications across various industries, revolutionising manufacturing, healthcare, logistics, and more. Insurers should consider new risk factors associated with autonomous robots, such as potential system failures, cybersecurity vulnerabilities, and liability in case of accidents. The shift towards autonomous technology may also alter the dynamics of insurance coverage, with a potential shift from individual liability to product liability coverage. By the end of the 2020s, transformative insurers should be providing specialised third-party liability products for all types of autonomous vehicles.

The harrowing effects of climate change are only becoming more pervasive as sea levels rise and temperatures soar, causing heavy rainfall, stronger storms, and severe droughts. According to the National Oceanic Atmosphere Administration, the annual average for natural disasters between 1980 and 2022 was just 8.1 events. But the first two months of 2023 alone saw 22 significant natural disasters (Global Disaster Alert and Coordination System). By 2030, the United Nations predicts that more than 500 disasters will be experienced annually around the globe.

This means an increased demand for new insurance products and comprehensive coverage over the next decade. A rise in parametric insurance products is one shift we can expect. These products pay out a predetermined amount when certain conditions are met, such as certain wind speed levels or rainfall, making them useful in extreme weather conditions. Disaster relief insurance is also set to boom, with insurers providing more coverage to individuals and businesses needing immediate assistance in the form of cash payments, temporary housing, and food assistance when disaster strikes.

Covering the costs of defending lawsuits related to climate change and any damages awarded, change liability insurance products are expected to rise to protect businesses and governments from legal claims related to climate change. Climate resilience insurance will also provide more coverage for companies and governments that have taken measures to adapt to climate change, such as the building of flood-resistant infrastructure, developing drought-resistant crops, and implementing energy-efficient technologies.