The Hartford delves into the risk landscape as new threats emerge on the horizon
The Hartford delves into the risk landscape as new threats emerge on the horizon | Insurance Business America
Insurance News
The Hartford delves into the risk landscape as new threats emerge on the horizon
AI-driven challenges only the tip of the iceberg
Insurance News
By
Kenneth Araullo
The Hartford has gathered insights for mid-to-large sized businesses to address evolving risks across various industries.
In its latest Risk Monitor report, the insurer highlighted how the world is rapidly evolving with innovations in artificial intelligence, electric and autonomous vehicles, advanced medicines, and significant geopolitical and supply chain shifts. The pace of change is unprecedented and shows no signs of slowing down.
The rise of artificial intelligence (AI) is met with both optimism and concern. Some worry that AI could disrupt labor demand and reduce the need for human capital. There are many unanswered questions about AI’s future impact on workers, society, and the economy.
In its report, The Hartford’s Global Insights Center believes that AI will ultimately augment labor and enhance productivity over the next 30 years.
Meanwhile, ads for lawyers are increasingly visible on billboards, websites, social media, and television. This change in the business model is driven by plaintiffs’ lawyers who now have more resources to attract clients promising significant payouts. Hedge funds and other investors are fueling this shift by funding litigation for a share of the winnings.
In the past year, third-party investors spent $22 billion, primarily in the US, on lawsuits they were not legally involved in. This investment helped fund $1.4 billion in advertising to attract litigants. Despite the size and impact of this industry, it remains largely unregulated.
In the realm of property and cybersecurity
Business owners face a growing number of risks, from natural disasters to ransomware attacks to equipment failures. Accurate property valuations are essential for any property insurance program, yet companies often underreport the value of their assets, potentially leaving them underinsured.
To ensure accurate valuations, business owners must provide comprehensive information about their properties, including size, age, use, and any unique construction details.
On the other hand, at the current rate of growth, damage from cyberattacks is projected to reach $10.5 trillion annually by 2025, a 300% increase from 2015 levels. With more regulations and frequent sophisticated attacks, companies must be aware of cybersecurity best practices.
Once a company realizes it has fallen victim to a cyberattack, it must execute an incident response plan (IRP). An IRP includes preparation, identification, containment, mitigation, and recovery from a cyber threat. It is crucial for leadership to familiarize themselves with the IRP to avoid overlooking critical elements during an attack, thereby reducing the resources needed for remediation.
Robots and supply chains
The introduction of autonomous robots and AI has the potential to transform business operations. For instance, warehouses may reduce workplace injuries by using robots for hazardous tasks like carrying heavy materials or working in noisy or toxic environments.
While robots require sensors, visual data, and sometimes human intervention, they allow workers to focus on more engaging tasks. In 2024, nearly 21% of warehouses use robotics, up from 15% in 2018.
Meanwhile, on the supply chain side, businesses are urged to have robust plans to protect against disruptions caused by natural disasters, transportation issues, or supplier failures. Companies should map out their supply chains, understand dependencies, and have contingency plans and backup inventory for global operations.
A comprehensive understanding of operations and risks is critical to maintaining continuous operations and safeguarding revenue.
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