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Sparkes highlights key insurance issues to watch out for
Sparke Helmore Lawyers says there are a number of key trends emerging in the insurance sector that businesses will need to be wary of.
Emma Musgrave
The national law firm was the Australian commentator for the inaugural annual Risk Radar Index launched by Global Insurance Law Connect this week. The report pulls together the key themes from across the GILC network that insurers should have in their sights.
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According to Chris Wood, Sparke Helmore national practice group leader for commercial insurance, a number of key issues are making headway in the sector, signalling a change for businesses operating in this space.
“In an interconnected world, risk and its associated insurance solutions continue to become ever more global. While the specifics of today are important, sometimes the bigger question is what changes are coming and how to spot them ahead of time?” Mr Wood said.
“With this problem in mind, the GILC wanted to use the entire network’s expertise to give our collective client base a reference tool that highlights the key insurance issues across many countries. The Risk Radar report gives a snapshot of the major issues that are currently bubbling up in each major insurance destination where the GILC has a presence.
“Across the world, some themes come up time and time again. For example, many countries are struggling with regulatory issues. The frequency and complexity of changes to local laws is a continuous challenge for insurers with global reach.”
Natural catastrophe is also a dominant global theme, Mr Wood explained, noting “the balance between government relief and the need for individual protection is one that faces a number of countries”.
“The impact of technology too crops up in all its forms — from e-commerce to insurtech — as business struggles to reduce its costs and increase efficiency,” he added.
In Australia specifically, Gillian Davidson, partner commercial insurance at Sparke Helmore and GILC Board Representative for Asia-Pacific, said: “The Australian insurance market is in the midst of volatile times, a reflection of the hardening global market, but also of the renewed focus on doing the right thing and restoring trust post the recent financial services royal commission.
“A number of issues stand out as having a significant impact on the local insurance industry and the way it operates.
“The top three issues for Australia focus around the ripple effect of the construction boom on the insurance industry, particularly amid the rising incidence of building failures; the pain points being experienced by insurers around D&O insurance with record numbers of class actions and event-based claims; as well as the increasing frequency of climate-driven disasters in this country.”
