World Economic Forum (January 21-24, 2020) & Insurance
This year marks the 50th anniversary of the World Economic Forum’s annual meeting. WEF is an 'international not-for-profit organization established to foster public-private cooperation' with a view to improving the most pressing global issues facing our local communities and the world at large. A meeting designed to bring political, business, cultural and other leaders together to drive and influence positive global change.
The topics discussed are varied and many over this four day event. The 2020 theme is “Stakeholders for a Cohesive and Sustainable World” with sessions covering everything from sustainable markets, social justice and tax to migration myths. Challenges that affect our economic stability today and into the future.
With the 3rd day of the World Economic Forum wrapped up - it got us thinking!
How is the insurance industry meeting the challenges identified at this forum?
Many of these challenges already have the attention of insurance companies, as we deal with an increase in the number and severity of water and fire claims directly related to the effects of climate change due to more severe storms and hotter dryer conditions (depending on the location).
Insurance reinforces and strengthens global, regional and local economies by:
- Offering financial protection against potential insurable losses
- Providing security and confidence so business leaders can explore new technologies and transformation to sustainable processes required to offset climate change and other risks
- Encouraging investment through innovative insurance products that address new business needs
- Offering stable product coverage so business can sustain affordable pricing for their consumers
- Being prudent with our policyholders’ funds, through proper corporate governance so as companies we continue to provide stability and growth to our policyholders and others.
Why do we feel the World Economic Forum is important?
The Global Risks Report 2020 identified 10 risks that will have the most severe economic, social and environmental consequences over the next 10 years. While they are all significant, from an insurance perspective we will focus on the risks that we see as being most impactful to our policyholders.
- Climate action failure; Extreme weather; Natural disasters
- As summarized in the report, climate change is striking harder and more rapidly than expected
- Cyber attacks
- With more than 50% of the world’s population now on line and two-thirds of the global population owning a mobile device, cyber insecurity is becoming a significant risk.
If not addressed, at the local, regional and global level, the above risks will continue to have a negative impact on insurance, eventually leading to higher premium costs and restricted coverage availability.
Heavy stuff, especially with the fast pace of change we experience today. Our world is transforming and we are at a crossroads between what we know and what we still need to learn.
What has Middlesex Mutual Insurance done to help our members with climate and cyber related losses?
Products we offer include:
- Water Shield protection:
- Coverage designed to provide a combined overland water and sewer back-up solution for qualifying risks to help mitigate losses our policyholders experience due to increased heavy rain events and severe storms.
- Cyber One coverage:
- Coverage designed to help qualifying small businesses recover from damage to data and systems caused by a computer attack:
- unauthorized access to insured’s computer system;
- virus/malware attack;
- denial of service attack
- Defense and liability coverage for third-party lawsuits alleging damage due to the insured inadequately securing its computer system.
- Coverage designed to help qualifying small businesses recover from damage to data and systems caused by a computer attack:
- Data Compromise coverage:
- Coverage for qualifying businesses designed to provide a response for various types of data breach of clients, employees, and other parties’ personal information within the control of a business. A breach includes data that is lost, stolen or accidently made public.
With this year’s World Economic Forum about to wrap up, this might be a great time for us to check out the WEF website and gain a better understanding of the risks we all face. The challenges are big; however, knowing what they are is the first step towards making positive change.
We can all make a difference!
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