Daily Market Update - October 23, 2014

Canadian terrorist attack is a wake-up call for us all… Insurance industry challenged by digital future… Insurers say technology will make drivers more like airline pilots…

Risk Management News

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Canadian terrorist attack is a wake-up call for us all
Following yesterday’s events in Canada with a soldier being shot dead by a radicalised Muslim extremist at the Parliament buildings, the world’s governments are re-evaluating their readiness. Although part of the coalition fighting Islamic State in Iraq and Syria, Canada would not have been at the top of the list of targets. This was a different type of terrorism than we saw in 2001. 9/11 was designed to cause a high death toll; this attack was indicative of the IS policy of attacking any ‘valid’ target. The risk of a terrorist attack, although at a high point, remains low when considered in relation to many other risks but no-one can afford to be complacent. For businesses there are potential threats to property, people and operations. During yesterday’s lockdown safety was quite rightly the top priority but from a business point of view how would your clients deal with regular situations where their ability to operate was compromised? What can businesses do to ensure that their property is well-protected from a random attack? What needs to be done to maximise the safety of staff, both home and abroad? The answers will not be the same for all businesses, but the principle is. While the risk to specific businesses or individuals remains statistically low, it is both prudent and sensible to undertake risk assessments specifically focusing on terrorism sooner rather than later.
 
Insurance industry challenged by digital future
A new report from KPMG says that the insurance industry faces multiple challenges from the digital future. Transforming Insurance delivers a vivid picture of the global insurance landscape, as market players respond to the changes that are transforming all aspects of the business. Highlights of the report include a huge shift in the eagerness of insurers to use technology to reach new markets and to deliver products and services. This is not just about using websites but also increased use of data to better understand trends. Insurers will increasing digitize their supply chain, the report says. Among the biggest challenges are regulatory restrictions that may make it hard to implement some elements of a digital operation. Read the full story.
 
Insurers say technology will make drivers more like pilots
As driverless cars get closer to appearing on our roads, the UK insurance industry has been detailing the challenges to a government safety committee. The Association of British Insurers’ motor policy advisor Scott Pendry told them: “The advent of driverless cars on our roads is no longer the stuff of science fiction – it could be a reality in the next twenty years. Technology, such as autonomous emergency breaking, is already changing the driving experience and driverless car technology is set to revolutionise it.” He says the there is likely to be a shift in liability depending on whether drivers are overseeing the vehicle or not, presenting challenges in claim litigation. In summary though, Pendry is upbeat: “While there are a large number issues and unanswered questions around driverless cars remain, the potential benefits – safer roads, and potentially lower motor insurance premiums – are huge.”

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