Companies face risks to themselves and their employees that can cause significant damage. However, it is difficult for insurers to assess the full extent of risk in some cases. Therefore, we have developed early warning indicators for the insurance industry, which can be used in the underwriting process to identify risks early and accurately. For instance, statistical analyses show that companies have a higher mean and variance in expected accidents when they do poorly based on our developed occupational safety indicator. Hence, this finding suggests that companies with low occupational health and safety scores are likely to have more accidents.
The 2021 Global Risk Report made clear what had long been unimaginable: climate risks represent the largest and most threatening risk category of our time for the fifth year in a row, with extreme weather events far outpacing all other risk types. In addition, companies must contend with new regulatory risks and demands from climate change. For instance, companies must comply with specific caps on CO2 emissions, which create potential further costs. Reputational risks are particularly relevant for companies with climate-damaging activities. On the other hand, litigation risks refer to charges arising from punishable actions by companies in connection with climate policy laws. The biggest challenge in the financial assessment of climate risks is, in particular, the diverging time horizons.
Directors and officers insurance, also known as managerial liability insurance, is taken out by companies for their senior executives. Constantly changing corporate governance requirements increase the risk that companies and their executives face in the event of a loss. Therefore, it is challenging for the insurance industry to price such risks adequately since correctly quantifying and estimating the actual D&O risks faced by the individual corporation is complicated. Our approach can evaluate and price the D&O risk of your policies based on the underlying data.
Cyber risks are among the 15 most severe risks and represent an ever-growing economic and existential threat to companies. However, too few companies have adequately implemented sufficient measures to minimize these risks. Therefore, in addition to risk avoidance, reduction, and acceptance, risk transfer via insurance is increasingly becoming essential for companies to avert a possible total economic loss. However, to do so, it is necessary to assess the risks as accurately as possible. For this purpose, we have linked various data sources, particularly cyber and sustainability data. In this way, the development of cyber risks is forecasted as a function of certain company factors.