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Published 12 January 2022
International law firm DAC Beachcroft has today published over 150 insurance predictions, aimed at supporting the global insurance market in preparing for the opportunities and challenges ahead.
Accessed via the firm's Informed Insurance thought leadership site, the insurance predictions are categorised by six key themes:
The predictions are also grouped under 17 different classes of insurance business, ranging from aviation, cyber and international casualty through to marine, property and reinsurance.
Helen Faulkner, Global Head of Insurance at DAC Beachcroft, commented: “We hope insurers will find our insights valuable in planning for the future.
“There is a significant overlap in environmental, social and governance (ESG) issues that we are seeing emerge, which highlights a sweet spot on which to focus our attention in the year ahead to create a resilient industry of which we can all be proud.”Climate change and class actions
On the impact of climate change and ESG issues, the predictions question whether the COP26 climate change summit in Glasgow will provide the impetus to move the rhetoric into action. They consider what new exposures D&O insurers will face as the UK moves towards mandatory ESG reporting and they anticipate that climate change activists will increasingly turn to the courts to make companies comply with existing law and regulation around reducing emissions. With climate change continuing to cause severe flooding, they ask who should provide the cover for those vulnerable communities most affected and least able to pay for protection. Is it society, the insurance industry, government? Or a combination of all three?
Class actions are also predicted to continue to build across the world this year, with expansion of the litigation funding market, increased awareness of access to justice and successful media campaigns all fuelling the trend. Social inflation, the US phenomenon that is driving increased claims costs, will become a global trend and foreign litigants and claimant law firms will increasingly target UK incorporated companies in relation to the impact of their operations worldwide. It is also anticipated that there will be an imminent wave of class action litigation linked to PFAS compounds, also known as ‘forever chemicals’ because they do not degrade in the environment.
The full set of predictions can be found here.