Insurance and investments consultancy Broadstone has stated insurers must do more with regards to geopolitical risk.
The latest Insurance Risk Monitor from Broadstone highlights the heightened geopolitical risk environment and how insurers can navigate.
Go deeper with GlobalData
It provided a number of scenarios that insurers should consider:
- War in Gaza escalates into a wider regional war
- Russia-Ukraine war escalates into a direct conflict with NATO
- Breakdown of US-China trade and diplomatic relations
- Invasion of Taiwan
- South China Sea territorial conflict
- US civil war
- Disorderly dissolution of the European Union
- Interference in US / Europe elections and civil unrest
- North and South Korean war
- Major cyber-attack and banking system failure
- Scenario 6: Two or more of the above scenarios occur simultaneously
Furthermore, the firm stated the importance of scenario analysis. This would benefit from consulting with experts from outside of the sector.
Some key areas that would benefit from better quantification of geopolitical risk include the ORSA, business planning, reserving, pricing, capital modelling, exposure and aggregate management, model validation, reinsurance purchase and underwriting.
Bharat Raj, Head of London Markets at Broadstone’s Insurance, Regulatory and Risk division, said: “The volatile geopolitical landscape at present is of huge global concern – especially the conflicts in Ukraine and the Middle East, which have been going on for a long period already. The potential deterioration between US and China relations also remains a significant risk.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“These are fast-moving situations with potential consequences that reach far beyond their borders and present a threat to economies across the world. Although direct losses from these events may be limited, for example through exclusions, insurers should not underestimate the potential knock-on impact on their businesses, which is likely to be material across all classes of business.”
