Three clear insurance trends already developing in 2017
We're a month into 2017 and there are already some clear signs surrounding the upcoming insurance landscape - so what trends can we expect to see as the year pans out?
RPC has released the details from its Annual Insurance Review which it believes has already identified the developing trends that could appear within the marketplace this year:
Increased numbers of new professions/hybrid businesses
The report suggests that a wide range of emerging new professions will require the appropriate indemnity insurance, making 'miscellaneous PI' as it's being touted one of the fastest growing policy types in its own right.
“PI providers are catering to a growing client base of new professions and hybrid businesses. In most cases, this means totally new territory,” James Miller, partner and head of insurance and reinsurance at RPC said. "These businesses are often based on new concepts like app-based advice – and they need PI insurance to match. They do not fit into any pre-existing ‘boxes’ – and this means a lot more care and attention is required on the part of the insurer."
Cyber liability for SMEs
The second growing trend relates to online protection in cyber liability insurance. This is common among bigger businesses, but there will be a growing demand for small and medium-sized enterprises (SMEs) to take similar steps in protecting their customers - something of increasing importance in an atmosphere of data breaches and hacking attempts.
“Big businesses are asking their supply chain of SMEs to get this insurance,” continued Miller. Cybersecurity is no longer just a big business concern. Smaller businesses also hold a huge amount of data and customers are increasingly concerned about the effects a data breach could have on them. This is a trend likely to grow in 2017.”
FCA review of PI for IFAs
This could be considered less of a trend and more of a growing issue within the industry. RPC has pinpointed the Financial Conduct Authority’s consultation on the funding of the Financial Services Compensation Scheme (FSCS) as crucial as it could mean that liabilities that were normally covered by the FSCS are potentially moved across to PI insurers.
“IFAs could be very much in the firing line as the FCA looks to balance out FSCS funding,” said Miller. "One way they may look to do this is by shifting some of the current liabilities of the FSCS onto PI insurers – which will considerably ramp up how much IFAs will be charged for protection."