Climate change tops reinsurers worries

Climate change is now the most significant risk facing the global industry, according to reinsurers participating in PwC’s latest “ Banana Skins” survey.

The report is based on a survey of more than 600 working in life, non-life re/insurance and broking businesses across 47 territories, including 30 in Bermuda. While, overall, climate change ranked fourth in the list of risks facing the insurance industry, among reinsurers and those on the non-life side, it ranked first.

Even among all respondents, three-quarters of whom were involved in primary insurance, climate change ranked fourth, up from sixth in the previous survey, and the biggest riser by score in the survey.

“More broadly, many respondents commented that beyond the next 2-3 years, climate change is the greatest threat of all to the industry,” the report adds.

Overall, the most significant risk identified by those surveyed was crime, driven particularly by cyber threats.

“Concerns about insurers’ ability to underwrite cyber risk are high in part because these events are difficult to model. One worry is that insurers are underestimating the potential costs of cybercrime when writing policies,” the report notes.

It also quotes, among others, an un-named CFO of a broker in the Nordic region, who said: “A massive global cyber event is the nightmare for a number of carriers, not least the large reinsurers.”