Cyberthreats and talent gap concern brokers and SMEs in UK and US

Cyberthreats are the emerging risk that brokers and businesses connected to the insurance sector in the UK and US are most concerned about, according to a survey from Argo Group International Holdings. The resulting report, The Future of Insurance – 2018 Insights: Risks, Uncertainty and a Looming Talent Gap, also reveals widespread unease with the growing talent gap, as the industry struggles to attract a new generation of underwriters. The survey of 150 brokers and 200 small and medium-sized enterprises (SMEs) found that 100% of brokers said cyberthreats are a medium- or high-priority emerging risk in the next 12 months, while 84% of SMEs reported the same. After cyberthreats, SMEs ranked the following as the top three medium- or high-priority emerging risks in the next year: virtual technologies (70%), the internet of things (64%) and climate change (58%). Brokers however ranked the risks: the internet of things (87%), drones (72%) and blockchain technology (64%). In its report, Argo states: “Even though cyber risk is on the rise, SMEs seem overconfident and underprepared – 61% feel prepared, and 43% have no plans to buy cyber insurance – which leads to heightened vulnerability. There is a widespread belief among SMEs (78%) that automation and artificial intelligence will expose them to new liabilities.” Nearly half of brokers (49%) ranked Russian cyber hacking as the biggest potential global threat to their clients, followed by the trade war between the US and China (45%), terrorism (43%), the US political climate (42%), worsening relations with Iran (26%), and escalating tensions with North Korea (22%). SMEs are most concerned by the US political climate (40%), followed by Russian cyber hacking (34%). The talent gap in the insurance industry “is happening at a time when such expertise is vital to cope with complex perils like cyberthreats and climate change, which are evolving with speed and unpredictability, coinciding with a time of volatile geopolitics”, notes Argo. It adds that the talent gap is worsened by a perception that it is slow to innovate. The survey found that 54% of brokers believe the biggest industry talent gap in the next five years will be with underwriters, while 35% of brokers attribute the talent shortage to a general slowness to innovate in the industry, and 32% cite an overall lack of knowledge about the insurance industry. Brokers generally agree there is no shortage of talent in sales, marketing, legal and administrative roles. “At a time when technology and emerging risks are evolving at a rapid pace, the significant gaps in knowledge revealed in the survey pose a clear challenge to the industry. This wide-ranging research demonstrates that there is an opportunity for the industry to develop a new generation of talent to help businesses navigate uncertainty and evolving risks,” commented Gary Grose, group head of producer management at Argo Group. Across the board, the survey found that there is some reluctance among both brokers and SMEs to innovate with new technology, with cost the biggest culprit – 45% of brokers and 41% of SMEs cite cost as the most significant barrier to innovation. “Specialty insurance is in a unique position in that it deals with new ideas and new threats – and that means new opportunities and new challenges. Despite some hesitancy on the part of both brokers and SMEs, the clearest and most effective way for established insurers to ensure sustainable growth is to combine advanced technology with insurance expertise,” said Mr Grose.

Cyberthreats and talent gap concern brokers and SMEs in UK and US

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