Read a newspaper, website or social media 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.
2020 was a seismic change in how we all live due to the impact of the Covid 19 pandemic. It has been a time of severe disruption for the UK, and indeed the world, and has brought much financial difficulty for many. Insurance plays a part in the recovery from what disruption creates for individuals, families, business, and society.
In the eyes of consumers, insurance is something that has been related 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, particularly in the unprecedented times we have recently experienced.
Here are examples of how insurance makes a difference in ways that you may not have considered:
Insurance professionals have shared with us how they have been helping their clients reduce the amount they pay in premiums where, due to the impact of coronavirus, there has been a reduction in risk, but where cover is still needed, for example the recently widely reported reduction in the cost of motor insurance or the extensions added to some travel policies.
Cyber-crime in recent years 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 to 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. 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.
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 2019/2020, Australian Bush fires. The fire season, one of the worst on record for the country, burned more than 13 million acres. As of January 2020, around 740 million Australian dollars had been reported as insurance losses as a result of the bushfires*.
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 internationally recognised professional qualifications and free membership make it easy for UK-based university students in full-time education to build their knowledge and networks.