What are the 10 major risks driving the industry today?

Moody’s CRO presses cyber is the most common risk across sectors and regions.

There are major risks impending in the industry today, which demands agility in addressing these and meeting evolving customer needs to ensure long-term viability and resilience. Moody’s Chief Risk Officer (CRO) cautions of 10 risks insurers need to be more vigilant with.

Lists of top risks, threats, and opportunities in insurance are common, sparking debates about their ranking, said Robert Muir-Wood, CRO at Moody’s RMS, in a blog insight.

Insurers face questions about adapting to changing risks, like infrastructure strain due to climate change or shifts in life insurance post-pandemic.

Risk landscapes are evolving with supply chain shocks, the pandemic aftermath, and geopolitical tensions. Insurers adjust to inflationary pressures and rising customer expectations, especially in cyber insurance.

ALSO READ: Health and safety overtake cyber risks in corporate concerns – Clyde & Co.

Ten major risks, from cyber threats to climate tipping points, shape today's insurance landscape:

1. Cyberattacks, now routine, challenge insurers to protect against evolving threats. 
2. Climate change feedback loops accelerate warming, emphasising the urgency of mitigation efforts.
3. Achieving net zero emissions requires navigating scientific, social, and economic complexities, with risks like carbon capture failures looming. 
4. Green technologies offer new opportunities but also introduce new risks.
5. Insurability for catastrophic perils needs to have a better understanding of the risk in front of insurers and efforts must be two-fold to mitigate short and long-term risks.
6. Post-2007 economic instability contrasts with the "Great Moderation" era, impacting insurers with inflationary pressures and higher costs. 
7. Regulatory responses aim to balance consumer protection and insurer sustainability.
8. Geopolitical tensions disrupt global trade, affecting insurers' risk assessment and business continuity planning. 
9. Infrastructure ageing and new construction raise concerns about resilience in the face of climate extremes.
10. Long-tail claims, fueled by factors like social inflation and evolving legal landscapes, challenge insurers' reserves and policies. Advances in healthcare extend lifespans but also present challenges in predicting future trends and managing chronic illnesses.