| Link(s): | New joint IUA-Airmic report seeks to close insurance protection gaps – IUA 11379_IUAThoughtleadershipreport_v7_061626 |
Context
The IUA, in association with Airmic, has published a joint report addressing the issues around ‘protection gaps’ and what can be done to combat them. Such gaps emerge as organisations face risks that insurance cannot fully cover, as some exposures are too uncertain to price or losses may be too large for commercial markets to absorb. Increasingly, some emerging risks are also simply too new and lack the necessary data for insurance products to have developed.
Key points to note and next actions
- The paper makes the recommendation for the market to pilot outcome-based policy structures for well-defined risk scenarios – particularly relating to data centre failures and supply chain disruption, both of which combine several risks areas.
- Other recommendations for how insurance protection gaps can be lessened, and even closed, include reviewing the process by which policy exclusions are finalised for major classes of business and developing new approaches to testing insurance wordings against loss scenarios.
- The report also recommends establishing three-way engagement between underwriters, brokers and buyers, as well as greater investment in education for risk managers.