A recent survey conducted by Munich Reinsurance America Inc. (“Munich Re US”) and the Insurance Information Institute (Triple-I) has revealed that cyber incidents, changing climate conditions, and business interruption are the top risks on the minds of both insurance buyers and sellers in 2024. The survey, called RiskScan 2024, provides valuable insights into the risk perceptions of key stakeholders across the insurance market.
Cyber and Climate Concerns Top the List
The RiskScan 2024 survey looked at risk concerns from individuals across five key market segments, including property and casualty (P&C) insurance carriers, agents and brokers, middle-market business decision-makers, small business owners, and consumers. Across all segments, cyber incidents emerged as a major concern, reflecting the ongoing anxiety over cyber threats and their impact on businesses and individuals.
The changing climate is also a major worry, with survey respondents pointing to the increasing frequency and severity of extreme weather events as a significant threat. Consumers are particularly worried about natural catastrophes, including “non-peak” perils like thunderstorms, tornadoes, and floods, highlighting the need for adequate preparedness.
Business Interruption Still a Major Challenge
Business interruption remains a key risk, driven by residual effects from the pandemic, natural catastrophes, and ongoing supply chain issues. The survey highlighted that both insurance professionals and businesses recognize the importance of managing business interruption risks, but there remains a gap in understanding the need for comprehensive coverage.
Knowledge Gaps Lead to Coverage Issues
One of the critical insights from RiskScan 2024 is the gap in knowledge among consumers and businesses when it comes to risk awareness and insurance coverage. Many consumers remain unaware of the importance of proper flood and cyber coverage, despite acknowledging the existence of these risks. Insurance professionals, meanwhile, are tasked with better educating their clients to close these knowledge gaps and ensure adequate protection.
Emerging Technologies: AI on the Radar
Artificial intelligence (AI) has been identified as the top emerging technology across all five market segments, reflecting its growing influence in both the business and insurance landscapes. The survey suggests that the insurance industry will need to continue developing and adapting products to address the unique risks associated with AI and other emerging technologies.
Industry Calls for Enhanced Consumer Education
According to Sean Kevelighan, CEO of Triple-I, there is a continued need for education about insurance risks, especially when it comes to complex and evolving areas like cyber threats, flood risks, and legal system abuse. The findings from RiskScan 2024 underscore the importance of increasing awareness and providing clear, actionable information to consumers and businesses to prevent them from being underinsured or inadequately protected.
Kerri Hamm, EVP at Munich Re US, also emphasized that understanding customer risk concerns is key to creating insurance products that truly meet client needs. By addressing these concerns, insurers can design better products, set more accurate prices, and ultimately help build more resilient communities.