Notes from San Francisco: Honan lists top client trends

Honan has outlined the top four trends set to impact clients, identified after a cohort of leaders travelled to San Francisco for the 66th Worldwide Broker Network (WBN) Global Conference.

Melbourne-based Head of Global & Networks Steve Pappas says that over four days, brokers discussed global insurance trends, insights and lessons learned from the last 12 months, and explored opportunities to collaborate on new initiatives for the benefit of mutual clients.

Here are the top four global client trends he says were identified:

Cyber

Cyber risk was a dominant theme in all discussions, Mr Pappas says, as brokers navigate complex renewals every quarter across all industries.

He says the best way for clients to maintain broad cover at the most competitive premium was embedding robust cyber security controls.

“Insurers are now dropping capacity and enforcing premium uplift, with companies only able to achieve their required insurance limits upon successfully demonstrating best-in-class cyber controls and procedures,” Mr Pappas said.

Artificial Intelligence (AI)

AI and a surge in connected devices have dramatically increased the volume of information available to insurers, and this is expected to streamline the underwriting process, particularly for personal and small business products. Honan expects major AI-enhanced changes in the insurance industry over the next five years.

ESG

Environmental, Social & Governance is now a critical consideration for underwriters, particularly at directors & officers cover renewal time, and Mr Pappas says companies that can show evidence of strong principles can expect more favourable policy terms.

Supply chain

Due to covid and Russia’s invasion of Ukraine, supply chain disorder, delays and shortages are leading to breaches in contractual requirements by many of Honan’s clients, and acts of war terms mean business interruption policies are often not triggered.

Mr Pappas says it is key that insurers and brokers maintain ongoing talks with clients about what is and isn’t covered. While supply chain issues should be covered under the business interruption section of most policies, sums insured and limits need to be “interrogated and confirmed” with the client to be sure cover is adequate.