Public liability for companies: the growing weight of environmental and technological risks.

The report “Global Claims Review Liability in Focusby Allianz Global Corporate & Specialty has just been released. The figures highlight the growing weight of losses related to environmental or digital causes. A structural trend that we have not neglected since the launch of this Newsletter.

Allianz Global Corporate & Specialty (AGCS), the major risks branch, has recently released its annual report on companies’ public liability risks. The « Global Claims Review » is based on the study of 100 000 claims all around a hundred countries for a total amount of nearly 9 billion euros.

Usually, at the top of public liability losses are the impacts of faulty products (1), collisions and accidents (2) and human mistakes (3). The highlights the growing importance of losses related to technological evolution and climate change: products recall, environmental and cyber risks … These major losses (more than 1 billion $) concern all parts of the world and are more and more when talking about sharing liabilities and from a technical point of view.

A reality that our firm has anticipated by publishing several articles in our newsletter.

On the environmental risks plan

161 billion euros in 2016 have been paid in the world following the ecological catastrophes, 54 billion of which were paid by insurers, that is almost twice more than in 2015.  At the first place, the earthquake in Japan with 25 to 30 billion $, of which almost 5 billion $ were paid by insurers. The flooding of the end of May in France and in Europe generated damages for almost 3 billion euros.

On the technological risk plan

The evolution of technologies and practices, particularly in terms of sharing economy (crowdfunding, platform, etc.) takes to the evaluation and anticipation of risks.

Positive evolutions, like Airbus autonomous car (see the month’s picture) should very soon improve road security. However, the risk is inherent with the example of UBER TECHNOLOGIES that suspended its tests following an accident occurred on 24 March involving one of its unmanned vehicles in Phoenix (Arizona).

It is important to think about the challenges of these new technologies on the long term. Who will be held responsible for accidents involving autonomous cars in car sharing?  And to what extent? The manufacturer? The software supplier? The fleet operator? The third parties involved in the accident?

At the same time, similar questions will rise with connected devices.

As such, the management of this kind of losses will rely on insurance companies’ know-how and on their loss adjusters support.

 

Laurent MICHEL Finance Loss Adjuster – Group GM Consultant