Preparation is the best form of defence

The two most critical risks facing Swedish companies are cybercrime and climate change – two areas where both the frequency and severity of insurance claims have increased, says Claes Hendil-Forssell, country manager Nordics and senior loss adjuster for Charles Taylor.

The majority of cyber claims involve cases of phishing, where users will unwittingly click on a rogue link that exposes their data and can also compromise a company’s network or systems. There is increasing awareness of the need for more robust cyber security, and more firms are also adhering to the ‘four eyes’ principle.

Similarly, there is greater awareness of cyber insurance and the role it can play – although this obviously means there will be a greater number of claims, says Hendil-Forssell.

The impact of climate change can clearly be seen by the rise in extreme weather events across Europe and in Sweden. What used to be a once-in-20-years event has now become much more regular. Flash floods occurred in 2021 and 2019, and since 2000 have increased by over 130%. And in 2014 there was a series of major wildfires in several areas north-west of Stockholm, which was probably the biggest fire event in Sweden ever. Swedish firefighters had to be supported by emergency services from neighbouring countries.

It is predicted that southern Sweden will become more prone to forest fires, so preventive measures will become more important, says Hendil–Forssell. Not only will more fire monitoring be required and restrictions widely communicated and enforced, there also needs to be greater adoption of insurance for forestry owners, she adds.

The increase in extreme weather has also served to highlight the growing importance of ESG. For Charles Taylor, this has led to a greater emphasis on the environmental impact from a property and casualty claim, says Hendil-Forssell.

Whereas the role of a loss adjuster in a traditional property claim would have primarily focused on the insured’s business premises, it now involves restoring and rebalancing the surrounding ecosystem. For example, in the event of an oil spill, what is the impact on the surrounding ecology and wildlife and how quickly can this be addressed?

The transition to net zero and use of green energy also creates new and complex risks that pose a challenge for loss adjusters, says Hendil-Forsell. “For example, what happens when solar panels break or a wind turbine malfunctions? What is the cost of restoration or replacement? There is a lack of historical data and this makes it very challenging for underwriters and loss adjusters,” she says.

Greater use of technology can help loss adjusters with these challenges, continues Hendil-Forsell. “For some time we have been using drones to help conduct surveys, especially in the case of floods or wildfires where it is hazardous for humans.”

Charles Taylor also uses software and drones that can help make speedier and more accurate calculations for claims, while greater use of collaborative, cloud-based software, or shareware, also helps loss adjusters communicate with each other. This is much needed for the more complex claims that may involve multiple loss adjusters all with their own specialisms. And ultimately it helps the clients because the claim can be resolved much quicker, says Hendil-Forsell.

However, insureds would benefit from involving their insurers, brokers and loss adjusters on a more constant basis and not just in the event of a claim, says Hendil-Forsell. “Property owners do not always have a great awareness of the role of insurance. If they make a change to their premises, they do not always inform the insurers,” she says.

“This makes it much harder for us to then make an accurate estimate in the event of a loss because we are not working with up-to-date information. We are trying to push for greater involvement from the beginning. We also need to approve any material changes to the business or its premises so we can ensure it is still insurable.”