LOOKING AHEAD
Insurance Industry : Looking Ahead
One thing that can be said about the insurance industry : it has demonstrated amazing resilience and adaptability over the last few years . That being said , we live in an ever-changing world with emerging and evolving risks .
Insurance exists to protect people and businesses against unexpected financial losses . To carry out this mission , insurers need to understand and prepare for what is ahead or have something in place that lets them pivot accordingly . Uncertainties spurred by global challenges , government regulations , and economic forces make the risk landscape hard for insurers to navigate .
Here are a few developments that will likely shape the insurance industry in 2023 and beyond .
COST INCREASES
Insurance rates are on the rise because of excessive repair costs brought on by economic inflation and social inflation ( things like increasing litigation , broader definitions of liability , more plaintifffriendly legal decisions , and larger compensatory jury awards ). These inflationary pressures — combined with the increased frequency of catastrophic events and the possible removal of some key underwriting factors used by insurance companies — will likely cause rates to continue to increase . Private companies may choose to leave the market , resulting in fewer options and higher costs for consumers .
It ’ s also important to note that amid concerns about the growing costs of health insurance , policymakers are beginning to take action . Several states have established cost commissions with authority to monitor and regulate the cost of care across both public and private insurance . With the challenges employers face in containing rising prices of employersponsored health insurance , many business leaders believe the cost is not sustainable .
CYBER RISKS AND THE NEED FOR MORE SECURITY
Cybersecurity continues to grow in importance . Companies need to take common-sense steps to protect their business from cybercrime , but now they also need to be aware of enhanced government mandates for protections that have to be in place to protect client information . Cyberattacks can cost a company over a million dollars in damages . Personally identifiable information — data such as an ID number , location data , or online identifiers — are the most reported data breaches , with credit and payment card information being one of the most frequently stolen pieces of data . In the medical industry , Protected Health Information ( PHI )— such as medical records — are also at risk .
Maintaining cyber liability insurance will help keep companies operational after an attack . An example of how cyber insurance can protect your business would be if you are hit by a ransomware attack . A policy may not only help reimburse you for the ransom payment , but it may cover your lost expenses as a result of the attack .
THE LEGALIZATION OF CANNABIS
There has been significant growth in cannabis stores across the country , and businesses must determine how they can address the issue of insurance in the
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