Important insurance and risk issues to watch in 2024 – part 4

From cyber preparedness to employee wellbeing

Important insurance and risk issues to watch in 2024 – part 4

Insurance News

By David Saric

Cyber preparedness, workplace violence and implementing artificial intelligence (AI) are among the most significant issues facing insurance professionals and risk managers in 2024 according to Sedgwick global chief brand officer Kimberley George, and Safety National vice president of client engagement Mark Walls.

During a recent Out Front Ideas webinar, the two named the top 20 issues that North American insurance workers and risk managers need to be paying attention to throughout this new year.

Five insurance and risk issues to keep an eye on in 2024

According to George and Walls, five key issues for insurance industry stakeholders and risk managers are:

  • Cyber preparedness
  • Workplace violence
  • Employee wellbeing
  • Exclusive remedy
  • Implementing artificial intelligence

Cyber preparedness

While the threat of cyber attacks and their related financial impact continues to grow with each passing year, businesses are still not as well equipped as they should be to withstand these imminent threats.

“No matter how prepared you think you are, when a cyber attack happens, you learn what you didn't know,” George said.

“Chief information security officers have long been concerned with cyber as it relates to infrastructure, and email — however, understanding that interconnectivity of users servers, cloud devices, web connections, data feeds, and the Internet of Things across your business is increasingly critical.”

Risk managers are astutely aware of the increasing risk to their businesses and work to quantify it, resulting in both cyber and disaster recovery systems — the latter ensuring business continuity after a breach or attack.

“Making sure that the cyber recovery and the disaster recovery are aligned is an important aspect of preparedness,” George said.

To create this more unified approach to combatting and avoiding cyber threats, George recommended that, “creating a cyber planning task force to assist with developing policies, procedures and workflow,” will also result in creating a company's fulsome cyber plan.

“A company may have the disaster recovery plan, but having the cyber plan will help them better understand who does what after a cyber attack occurs. We suggest creating this with a cross company team.”

Workplace violence

Workplace violence has been on a steadying and concerning rise over the past couple of years, whether in healthcare facilities, K-12 educational institutions, retail stores or against law enforcement officials.

“Anyone working closely with the public is exposed to workplace violence, but especially in public entities, retail, health care, transportation and education workers,” Walls said.

As a result, employers have had to focus more attention on workplace safety, not just for an employee’s physical safety, but their psychological as well.

“If workers do not feel safe at work, it adversely impacts their morale, job performance, and worker retention,” Walls said.

“The solutions to this problem are societal. Too often, those committing the violence are not arrested, and if they are arrested, they are often not prosecuted. Without significant repercussions, these violent attacks are likely to continue despite employers’ efforts to prevent them.”

Employee wellbeing

Employers have been working to create and sustain employee wellbeing recently, paying particular attention to mental health to ensure a productive and balanced workforce.

Benefit models that offer mental health care, virtual and in-person care, as well as apps for meditation, mindfulness, deep breathing, stress reduction and coping strategies are a few of the strategies they have been pursuing, according to George.

“These programs wrap around the specialty and chronic care programs, along with EAP employee assistance programs, and the health plan encouraging engagement,” she added.

This was especially prevalent during the infancy of the pandemic, where stress and mental anguish upended many individuals’ psychological balance.

“An area of opportunity is to improve mental health and wellbeing literacy for a workforce and make that available on a company portal,” George said.

“Think of it as an easy place to access information to learning about mental health matters personally and professionally, signs and symptoms of potential issues, self care and treatment options. It's often very difficult to know where to go to at those times you or your family member or your co-worker needs the most help.”

Exclusive remedy

Since the exception of workers compensation, lawyers have been trying to find a way around the exclusive remedy that is provided for workplace injuries.

“These suits are usually dismissed on summary judgment because the burden to overcome exclusive remedy is typically an intentional act or gross negligence, which is a very high burden to overcome,” Walls said.

There were a number of challenges to the exclusive remedy of workers compensation around COVID, with most of these cases claiming that the worker brought COVID home to their family from the workplace.

“For the most part, courts have not allowed these claims to be litigated,” Walls added.

However, two high profile cases in Virginia last year, both involving workplace shootings, saw a judge allow the claims to proceed on their merits and let a jury decide whether the burden to overcome exclusive remedy was met.

“The plaintiffs allege that the employer knew the risks and failed to take appropriate actions,” Walls said.

“The cases are worth monitoring because of the place plaintiffs were to prevail. I would expect to see similar suits in other jurisdictions.”

Artificial Intelligence

While AI is here to stay, there are certain risk factors to consider from a risk prevention mindset. 

According to George, risk managers should be asking their associated businesses the following questions:

  • Are you a first market company or a wait and see?
  • Are your internal stakeholders’ innovation drivers or steady as they go?
  • Do you have clarity on use case scenarios where you might benefit from AI?
  • Do you have the cost to implement and maintain such programs?
  • What is your return on investment?

To help streamline processes, risk managers may want to consider whether the deployment is solely an internal solution or how it impacts a company’s customers.

“Generally, they are conversational AI, machine learning and the suite of tech tools supporting AI have significant potential to change the way underwriting is performed.”

“AI is already supporting expedited claims processing for lower dollar high frequency claims and liability auto in the property space. The question is, will it begin to help us in workers compensation and potentially with fast-track medical only claims? There's a lot of use case scenarios for workers compensation.”

If you missed the first three parts of this series on the most significant insurance and risk issues in 2024, check out part 1, part 2 and part 3.

What do you make of the five insurance and risk issues outlined in this story? Please share your perspective in the comments.

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