Technology's influence on the insurance industry continues to grow in the age of digitalization. As the industry continues to infuse technology into its practice, it is increasingly susceptible to technological liabilities, such as increasing cyber and product liabilities and recall risks.
Business models in the digital economy are more complex and without clear borders, making liability harder to apportion and claims more complex to settle — despite the frequency of claims expected to decline. The growing "sharing economy" raises new questions about liability. In the future, a road traffic accident could involve the vehicle manufacturer, software provider, and the fleet operator, as well as third parties involved in the accident.
Allianz's Global Claims Review report, which focuses on global developments in liability-related insurance over the period 2011 to 2016, examines which future influences will impact liability claims going forward.
More liabilities for the automotive industry
The rise of autonomous driving will have a number of implications for insurers. Autonomous driving suffered setbacks in Arizona after a high-impact crash involving one of Uber's self-driving SUVs.
When the technology is perfected, car-sharing and driverless taxis will grow in favor while car ownership declines. Allianz predicts insurers moving from providing millions of single annual motor insurance policies to drivers and shifting towards large policies purchased by manufacturers, fleet owners and operators.
The shift to product liability will require insurers to develop technical expertise and not rely on historic data and driver profiling for pricing.
Printing up fresh liabilities
Manufacturing continues to search for faster and cheaper production possibilities. 3D printing provides such revolutionary feasibility. The technology is now widely used, especially for creating prototypes and bespoke parts in industries like aviation, automotive and the medical sector.
This will have a number of potential implications for insurance. While 3D printing could play a positive role in addressing rising business interruption exposures, it could also make it harder to trace products through the supply chain.
Insurance policies most affected by the development of 3D printing will be product liability and product recall, although there are implications for general liability, errors and omissions, directors and officers, workers compensation, as well as cyber insurance.
Insurers will have to keep an eye on how the materials used in 3D printing perform in the long-term. For example, products made on 3D printers use new materials, new techniques, and are used in new applications, all of which are untested over time. This could also wider implications for business interruption insurance.
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