Insurers can play a role in building resilience to ‘unforeseen risks’

By Erin Ayers on January 26, 2018

The insurance industry has a key role to play in assisting their clients in facing the challenges outlined in the recent World Economic Forum’s 2018 Global Risks Report, including cyber risk, environmental and sustainability risks, and political risks.

The report asks global leaders to reflect on the most serious challenges facing business, government, and society – in the 2018 report, environmental risks including extreme weather events, natural disasters, and failure to adopt climate change mitigation were named as some of the most pressing issues in terms of likelihood and potential impact. Cyberattacks also ranked among the top five risks.

According to Marcus Cooper, head of middle markets, North America commercial insurance, Zurich North America, insurers can encourage organizations to think about the risks to their supply chain that they may not have previously considered, particularly regarding natural disasters and cyber events. Zurich collaborated with the WEF and Marsh on the report.

“If we think about Harvey, every company thought about the usual risks when they bought insurance. They didn’t necessarily think about the contingent risks, the unforeseen impact,” said Cooper. He cited the potential for deliveries delayed by impassable roads after a flood, or a cyber event that takes a key supplier offline.

Cooper added, “We want to make sure that our customers understand their risk and the interconnectedness of their risk and the insurance products that can address that.”

The WEF report offers a deep look at the serious ramifications of extreme weather events and climate change on food supply and bio-diversity. Cooper explained that Zurich has taken a stand on reducing its carbon footprint and extending that position to its clientele.

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Erin is an editor at Advisen. She has 15 years of journalism experience. Prior to Advisen, Erin covered property-casualty insurance for 13 years as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at eayers@advisen.com.