Wednesday 11 May 2022 — Global Insurance Law Connect (GILC) this week launched its fourth annual Risk Radar. The report aims to capture the important legal, regulatory and socio-economic issues facing insurers in each country in which GILC operates. GILC member firm Sparke Helmore provided the commentary for Australia.
The 2022 report sees many of the areas of focus from last year continue to be at the forefront of members’ minds. The rise of digitisation and cyber risk, increased climate risk, and regulatory change are all themes that run through this year’s report, with insurers having to continue to adapt with 2022 being no less eventful than 2021. Many insurers have been turning their minds to the longer-term implications of the pandemic including potential consequences for the D&O market should the decisions of senior management during this extraordinary period come under the spotlight.
Malcolm Cameron, Partner and National Practice Group Leader Commercial Insurance, said, “The global issues of climate change and sweeping regulatory reforms particularly resonate in Australia, while we have seen limited traction in our market from global insurance trends such as M&A activity, disruptor insurtechs and the social inflation phenomenon.
“With the current annual cost of AUD$38B attributed to natural disasters, the insurance industry is committed to a proactive approach to climate resilience, with the affordability and availability of insurance an area of focus.
“Regulation remains a hot topic for the industry with 2021 marked by the introduction of a new Insurance Code of Practice and other far-reaching reforms, with many effective from January 2022. But this is not the end of it with many more reforms slated for the remainder of 2022 including a new Insurance Brokers Code of Practice.”
With increasing restrictions for third party litigation funders, class actions rounded out the top three issues for Australia. Late 2021 saw a swift rise in class actions, but this is expected to decline in 2022 if the intended legislative reforms—including the introduction of a cap on the amount funders can recover from the settlement proceeds—are passed.
The Risk Radar report covers Australia, Belgium, Brazil, China, Denmark, England & Wales, Finland, France, Germany, India, Ireland, Italy, Luxembourg, Mexico, Netherlands, New Zealand, Northern Ireland, Norway, Scotland, Spain, Switzerland, Taiwan and the United States. Click here to access the full report.