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Man pondering which direction to go while standing at crossroads. Another wrinkle in rising property risks is a lack of ordinance or law coverage for expenses relating to required demolition or removal of property. For example, one hurricane-damaged hotel in southeast Florida came up nearly $1 million short of the funds to rebuild, due to additional expenses required under a local ordinance. (Credit: 1STunningART/Adobe Stock)

A large and growing set of challenges is facing the insurance industry. New risks and threats are emerging, while others are becoming more complex. Loss frequency and severity continue to plague P&C insurers’ balance sheets and drive rate increases. At the same time, many policyholders are unaware of their true risks and underinsuring of their exposures. New regulations that create liabilities for employee benefits producers are going unrecognized by P&C producers. These are just a few of the challenges the industry has on its road ahead. Solving these will require the insurance industry to think differently about how it deploys its resources.

Risks today are similar to the tax code; they’re becoming more complex and harder to understand. Addressing ongoing and emerging risks requires a deeper analysis and higher-level thinking to develop solutions. This is true of most big-picture challenges, and until now the insurance industry has not fully grasped the need to reallocate its intellectual resources to meet them.

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