Page 78 - India Insurance Report 2023- BIMTECH

66 India Insurance Report - Series II

Additional risk mitigation steps include enhancing resilience through business continuity planning,
diversification, and collaboration. Lastly, organizations should routinely identify and assess emerging
risks and continuously devise strategies for both monitoring and managing these risks.

The nature of risk is evolving faster than ever. Commercial carriers must step up to fulfil the societal
desire for resilience in a volatile world by closing protection gaps - or risk losing relevance.

The sharing economy is absolutely an area of emerging risks, and emerging risks do not come
without challenges.

The biggest challenge is to determine what exactly needs to be insured and to create new solutions
for risks that traditional insurance products are unlikely to cover. It is not uncommon for sharing
economy platforms to double, triple or even quadruple in size from one year to the next, which puts a
great amount of pressure on the insurance product to be flexible with its offerings and coverage. But
with challenge comes opportunity.

In the age of big data, utilising big data is crucial in creating new solutions. It takes willingness from
participants to take on new risks to obtain a data exchange and begin to build out models to get an
actuarial perspective.
So how do we ensure that some of our past mistakes are not repeated when it comes to managing
emerging risk:

a) Closely monitoring the developments and being up to date with science-based research is one
of the possible solutions that insurers could use to mitigate these new, underdeveloped risks;

b) Work together as a group;
c) Review policies and coverages underwritten;
d) Ensure sufficient risk margins embedded for capital adequacy;
e) Seek help from experts

4. Emerging Risk 2023 and Beyond

Insurance Journal examined industries experiencing changes and a few challenges due to economic
forces, tough insurance market conditions, and societal pressure. The Insurance Journal has predicted
the following new and emerging risks in 2023 and beyond.

4.1. Cyber Complexities

Cybersecurity and fraud remain a widespread concern. More than two-thirds (71%) of those surveyed
by JPMorgan indicated they had been directly impacted by cyberattacks in the last six months. In recent
years, cyber and climate change have been at the top of every insurer’s mind. Cyber is the least understood
and has the potential for the largest risk exposure, yet we don’t have the historical data for it in the same
way as other types of risk.