In April 2019, when risk managers and other insurance professionals headed to Boston for the Risk & Insurance Management Society Inc. conference, few people thought there would be a three-year hiatus before the next personal RIMS.
The annual gathering was a peripatetic ritual for many in the US and international risk management community but was put on hold when the Denver conference scheduled for 2020 was canceled due to covid-19 and the 2021 edition was moved from Chicago to a virtual format.
Much has changed in the insurance world during these three years. While the hardening market was already an important topic of conversation in Boston, insurance prices have continued to rise at sometimes astonishing rates, extending risk management budgets and brokers̵7; investment opportunities.
Although insurers have benefited from these increases, they have faced other challenges. The annual consumer price index increased by almost 8% in February, compared with 2% in April 2019, which makes the pricing of insurance cover difficult as compensation costs rise. In addition, so-called social inflation, or rising jury prices and settlements, seem to drive even more increases when insurance companies try to adapt.
Of course, even more has changed in the outside world, which has had a direct effect on the risk management sector. The pandemic stopped some companies and restricted the activities of many others, while giving a dramatic boost to a few. The resulting crisis in the supply chain is still affecting companies and increasing their exposures.
In addition, ransomware attacks and other cyber-intrusions have increased since the end of 2019, with hackers from around the world extorting hundreds of millions from inadequately protected companies. The subsequent increase in the costs of cyber liability insurance and the reduction in capacity have created even more problems for commercial insurance buyers.
While the pandemic and persistent cyberattacks are relatively new experiences for most people, the effects of the war on those involved and the rest of the world are unfortunately not. Nevertheless, the repercussions of Russia’s invasion of Ukraine have been shocking. Obviously, the loss of human life and other humanitarian costs is paramount, but the economic consequences, including soaring oil and other commodity prices and even more supply chain disruptions, are affecting everyone.
Tackling problems with such a global reach is difficult, if not impossible, to do in isolation, but it seems that people are ready to change ideas. If the price of my plane ticket is anything to go by, a lot of people are planning to go to San Francisco to reconnect with RIMS, which resumes this month.
As organizations strive to adapt to such rapidly changing times, it will be crucial to benefit from the experience and expertise of many people in the risk management world, including colleagues and service providers.