Challenges for the insurance industry in the future

Abstract

The author discusses several development and trends related to insurance that were presented in May 2019 at the Florida State University Future of Insurance Forum, including the role of technology and catastrophe exposures. Advances in technology are changing the insurance industry, and its future workforce will require new skill sets and greater flexibility. The growth of exposures in coastal states, flood zones and earthquake-prone areas will necessitate updated tools for state insurance regulators and rating agencies to monitor financial solvency. More needs to be understood about climate change, the climate models and whether man-made climate change can be linked as a cause of future disasters. Although the loss adjustment processes of insurers have improved over time, the settlement of catastrophic claims entails continuing problems. Insurance linked security (ILS) products are serving to provide additional capital and to stabilize the rapidly growing reinsurance market.