Emerging Risk Trends
Key Takeaways
Commentary: Diverging global regulations are driving operational complexity - firms must align compliance strategies across jurisdictions.
Commentary: Insurers are focusing on systemic risk events, supply chain resilience, and how well firms have segmented critical infrastructure.
Commentary: ESG is now a battleground - UK regulation is tightening while US scrutiny intensifies under a politically fractured landscape.
Regulatory and Political Risk:
Regulatory approaches are diverging globally - particularly around ESG, conduct, and capital adequacy.
The US political climate has led to intensified scrutiny of ESG and DEI policies in insurance, particularly from state regulators.
In the UK, the Prudential Regulation Authority is pushing for robust stress testing and governance alignment under the 2025 competitiveness agenda.
Cybersecurity and Technology Risks:
Focus remains on catastrophe-type cyber exposure, especially from concentrated software or cloud dependencies.
Following 2024’s Microsoft/CrowdStrike event, underwriters are revisiting how insurers themselves manage their vendor chains.
AI use in pricing, claims, and customer engagement is triggering questions around auditability and bias mitigation.
ESG and Climate Risk:
In the UK, disclosure obligations are tightening under evolving climate and transition planning frameworks.
US scrutiny is mounting, with state-level opposition to DEI and ESG-related exclusions or investment strategies.
Boards are expected to evidence ESG integration beyond surface-level policy statements.
