Global Insurance Law Connect (GILC) this week launched its second 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.
Jim Sherwood, Chairman of Global Insurance Law Connect commented, “Shortly after our members drafted this year’s report, the world was shocked by the advent of the COVID-19 pandemic. As a result, we have decided that we will tackle the specific legal issues raised by coronavirus in a separate report in the coming months.”
Chris Wood, Sparke Helmore National Practice Group Leader for Commercial Insurance, commented, “We are already seeing COVID-19 have a significant impact across multiple lines of cover as the world goes into economic shock. Business interruption including event cancellation, entitlements under personal accident covers, D&O and investor litigation disputes and resultant claims are all expected to skyrocket.”
However, while COVID-19 is taking our full attention at this point in time, other market challenges still exist, some of them hugely significant in their own right, and somewhat brought into new focus by the impact of the global economic shutdown.
“For example, many countries continue to struggle with regulatory issues, including in Europe where there are still many unknowns around Brexit. The frequency and complexity of changes to local laws is also an ongoing challenge for insurers with global reach. Natural catastrophes and the impact of climate change remain dominant global themes, which will inevitably outlast COVID-19. The impact of technology too crops up in almost every jurisdiction, aligned to the influence of disruptors in the market. As the Radar indicates, product cycles are becoming even shorter with disruptors able to develop, test, deploy, re-adjust and, if unsuccessful, cancel products within weeks at relatively low cost,” said Chris Wood.
Gillian Davidson, Partner Commercial Insurance at Sparke Helmore and GILC Board Representative for Asia Pacific, reflected on the local market. “The Australian insurance market continues to experience extreme volatility. This volatility has been exacerbated by lingering trust issues around competence and ethical behaviour – with business at least being considered competent but coming up short on ethics
“There are three issues that stand-out as creating significant headwinds for the local industry. Climate risk tops the list, closely followed by the maelstrom that is technology. Throw into the mix the intense pressure from the extreme events that have happened so far in 2020, and insurers and their workforce are taking hit after hit.”
The Risk Radar report covers Australia, Belgium, Brazil, China, England & Wales, Finland, France, Germany, India, Ireland, Italy, Luxembourg, Mexico, Norway, Scotland, Spain, Switzerland, Taiwan and the United States. Click here to access the full report.
Note to Editors
Global Insurance Law Connect is a formal alliance of insurance law firms spanning four continents. Founder member firms are Batini Traverso Grasso & Associati (Italy), BLM (UK), Byrd & Associates (France) and Foran Glennon Palandech Ponzi & Rudloff PC (USA). Other members are Blanco & Asociados (Spain), Khaitan Legal Associates (India), Santos Bevilaqua Advogados (Brazil), Advokatfirmaet Riisa & Co (Norway) and Lydian (Belgium), Buren Legal (China), gbf Attorneys-at-Law (Switzerland), Lee and Li (Taiwan), Ocampo 1890 (Mexico), Socrates (Finland) and Sparke Helmore (Australia), and Arnecke Sibeth Dabelstein (Germany). www.globalinsurancelaw.com