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When insurance experts are asked what they see as the most important emerging risk for the property/casualty insurance industry, their consensus is cyber in some form.
While cyber obviously poses tremendous risks, some experts are also eyeing a variety of other emerging risks. These include risks inherent in government and insurance policies, not to mention blockchain, urban transportation, coastal property, retail deliveries and recreation.
1. D&O Privacy
The new Facebook lawsuit suggests that privacy-related concerns may already represent a potential new source of corporate liability exposure. The advent of the EU's General Data Privacy Regulation (GDPR) will magnify these possibilities. While predictions of this kind are always tricky, it may be that privacy related issues may represent an emerging and growing area of potential directors and officers (D&O) liability exposure. It is important to note that these kinds of privacy concerns involve not just new age behemoths like Facebook that are "Hoovering" huge volumes of personal information. Many companies are capturing vast amounts of client and customer information, many of them in traditional industries — think how much your airline, your pharmacy, your credit card company, even your electric utility know about you. Of course these companies are mining this information for their marketing efforts and pricing analyses. These companies may well be sharing this information with collaborators, joint venture partners, third-party vendors, and so on. The recent developments at Facebook not only show the problems that can arise with the use of this kind of information, but also underscore how claims that this kind of information was mishandled can lead to bad publicity, a corporate crisis, and even significant D&O litigation. I could be wrong, of course, but I think we will see more D&O litigation in the future involving privacy issues. Indeed, the advent of the GDPR could significantly increase the likelihood of these possibilities. — Kevin M. LaCroix, The D&O Diary and executive vice president, RT ProExec, a division of R-T Specialty
2. Government Actions
The greatest industry vulnerability is constantly evolving governmental actions. Government imposition of retroactive liability or limits on the ability of the marketplace to price risk can threaten marketplace stability. Industry security is also impacted by the effectiveness of government security policies preventing terrorist attacks — particularly cyber...
