Parametrics, cyber and D&O are set to take off in 2018
(Re)insurers in Latin America are being confronted with various new impact scenarios, which are leading to demand for new or additional coverages.
New approaches to risk transfer such as parametric insurance for loss resulting from weather and catastrophic events have begun to arrive in Brazil, expanding the range of risks that can be covered. The country has just seen its first climate-indexed parametric insurance policy offered by Swiss Re to a large agribusiness corporation, and we expect that this will now develop further in the country and elsewhere in the region.
A second impact scenario is the consequence of corruption. Operation Car Wash in Brazil, and its developing equivalents in other countries, have become a trigger for companies to purchase D&O liability insurance policies, as domestic and multinational companies have found themselves embroiled in bribery, anti-competition, and other investigations by the Brazilian and other Latin American Governments. This trend in the need for additional coverage seems set to continue.
And finally, 2018 will be the year cyber insurance takes off in Latin America. Despite cyber attacks being considered a top-three threat in many prominent risk surveys for potential buyers, fewer than 10% of companies in Latin America currently have cyber insurance in place. In Brazil, this year's far-reaching cyber-attacks have increased the demand for cyber-risk insurance by 200%, according to insurance broker Aon. As global insurers rush to launch cyber cover offerings in the region, we expect more to come.
You can read the rest of our insurance predictions here.
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