It seems that 62% of underwriters who took part in the survey have said they believe that insurance buyers (i.e. their customers) need to do more to prepare themselves for the impact of liability risk on their businesses.
This result is equivalent to a survey of the world’s biggest confectioners finding that 62% say that their buyers should eat more sweets.
Lloyd’s has said it is to examine liability as a “key emerging risk” for 2008. That may surprise many who thought that the issue of liability had always been at the heart of much of the insurance market.
Sadly, with the emergence of the “compensation culture”, there is no longer such as a pure accident or bad luck: someone has to be held liable and, as such, has to assume liability and pay the costs arising from the incident.
What must come as a surprise is the fact that there are 38% of underwriters who do not think that insurance buyers need to do more to lessen the impact of liability on their businesses.
As the market softens, the importance of risk management continues to increase, with insurers looking to stop claims before they arise.
Surveys can often give a genuine insight into the thinking of an industry and its clients, but you have to wonder who the one third of underwriters are that believe the area of liability has already been adequately tackled.
I am sure there are a few insurance buyers in this climate — in which underwriters are demanding ever greater levels of information to price risks — who would welcome a risk carrier that took such a cavalier attitude to it.
One thing that comes across loud and clear from the survey is that the financial burden of risk is only set to increase for global businesses as they seek to establish new areas of operation.
The majority of underwriters will be looking to increase risk management as prices continue to come under pressure, and businesses will be placed under pressure to cut down on avoidable claims.