Read a newspaper or website and you’ll see that the world is a risky place; it always has been and always will be, which is why insurance is such a valuable product. Insurance doesn’t just transfer risk away from you to an insurance company, it also restores you to the position you were in before an event damages you or your belongings.
In the eyes of consumers, insurance is something that relates to cars, holidays, houses and pets. There is also a huge business-to-business insurance sector that passes unnoticed by most people which plays a crucial role in helping the world’s businesses to exist and thrive. Insurance also means that you can go travelling or go to festivals.
Here are three examples of what insurance means in 2020:
Cyber crime has become the crime of choice for those who don’t want to get their hands dirty. It’s nearly invisible and evokes a less visceral reaction than a physical assault. It also costs the global economy more than $500 billion a year – with that number set to increase. Many insurance companies now have special cyber risk teams who can write policies that protect clients and reduce the risk of a breach taking place, and which can also deal with the reputational damage caused by a loss of data.
The increasing use of drones will power the largest growth in aviation insurance in 50 years according to experts. It is estimated that there will be almost 7 million drones in our skies this year. While drones have the potential to significantly enhance a range of activities, it is imperative that manufacturers, operators and regulators work together to ensure that they are used responsibility and safely. So far, insurance companies appear to not be adapting quickly enough to the rapid growth in drone usage.
Climate change is wreaking havoc with an increasing number of countries and to a more devastating extent than before. This is not just about catastrophic events such as droughts, floods, earthquakes, it relates to hurricanes too. Casting our minds back to the 2017 hurricane season was the costliest ever for the USA. Estimates suggest there was almost $202.6 billion in damages. However, the U.S. was not the only country to be hit with typhoons and hurricanes stricking other parts of the world such as China and Japan.
If special risks are more your thing, then how about alien abduction insurance? Thirty thousand policies can’t be wrong…or maybe you want to insure your amazing guitar-playing fingers? No problem. Anything can be insured, and London is the global heart of these special risks.
So, insurance is not necessarily what you think it is. If you want to know more, the Chartered Insurance Institute is a good place to start – it’s the world’s largest professional body for the insurance sector. Our globally-recognised professional qualifications and free Discover membership make it easy for UK-based university students to build their knowledge and networks.
Chartered Insurance Insitute, CEO