Liability claims have been lower-than-expected in recent years. This has boosted insurers' profitability despite declining liability prices, says Swiss Re's latest sigma study “Liability claims trends: emerging risks and rebounding drivers”. The weak economic growth environment has been a key reason for benign claims. However, new risks and stronger economic growth will increase claims severity and generate more demand for liability insurance.
New risks emerging
A number of technological, social, and regulatory changes will drive liability claims in the near future. Cyber risk and the liability from emerging technologies, such as hydrofracking and autonomous cars, may become more prominent in claims. Tort reform has dampened claims severity in some markets, but the effects were a one-off benefit and will no longer suppress claims growth to the same degree.
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