As the world becomes increasingly precarious, new risks haveeither not been addressed or have been by the industry's refusal toaccept the risk, said insurance industry legend Patrick G.Ryan.

“We haven't been as responsive as we need to be,” the chairmanand chief executive of Ryan Specialty Group said at Advisen'sManagement Liability Insights Conference in New York.

However, through innovation and a better spread of these newerrisks—cyber and contingent liabilities as examples—Ryan says thesurplus lines sector is in line for expansion.

“With every adversity is the seed to equal or greateropportunity if you search for it and figure out ways to solve it,”he said.

Patrick Ryan was one of NU's Living Legends ofInsurance. Read the story here.

Ryan's rallying cry to the industry had much to do with hisperception that it has yet to find ways to “solve the needs notbeing solved.”

The percentage of the gross domestic product (GDP) spent oninsurance is declining, he said. Right now large companies withhigh risk can't get insurance and are taking on the riskthemselves. “We can address that,” he said. “There is opportunity.These are not esoteric risks.”

“The future of this business is going to the innovators,” hecontinued.

The founder of insurance brokerage Aon would not accept cost orthe soft market as barriers to innovation. When asked what he wouldtell companies that believe the opposite, he said, “You're lookingat it wrong. Product development can be pretty inexpensive. What'sexpensive is not to innovate.”

“You've got to invest [in innovation] or you're not going togrow,” he added. “I never believed you can't grow in a softmarket.”

Innovation “best comes from the distribution side—the peopletouching the client,” he said. That aspect of insurance is alsochanging, he added.

Retail brokers have decided to do business with far fewerwholesalers and, in the meantime, wholesalers have gotten larger.Ryan says he does not think the largest of the wholesalers will getlarger, but he does anticipate merger and acquisition activity atthe regional and local wholesale level.