Summer 2018

Global Business: Rewriting the Rules

By Scott G. Stephenson

It’s been described as a consumer’s Bill of Rights as well as a massive potential minefield for companies doing business in Europe. GDPR, the acronym for General Data Protection Regulation, is making a strong and historic statement on where the European Union believes the walls stand to protect its residents’ data privacy.

When high-definition televisions reached the marketplace, they were considered a luxury. But as costs came down and consumer adoption rose, they became the norm. Now, if you stream a standard-definition video online, you’re likely to rub your eyes and wonder if it’s just a blurry image. Viewers want clearer pictures. And for the insurance industry, high-resolution aerial images from airplanes and drones are opening a new range of possibilities not attainable with lower-res satellite imagery and ground surveys.

In 2014, a field adjuster named Cory Shelton climbed onto the roof of a large home in Texas to conduct a routine insurance claim property inspection. A recent hailstorm had loosened the granules on the roof shingles, removing the traditional rough texture—and leaving a dangerously slick surface.

The word “noncompliance” tends to dredge up the notion of fines and other penalties imposed by government agencies. For fear of noncompliance, regulations are increasingly enforced in the business-to-business setting, with obligations pushed upstream to suppliers. Due to a host of regulatory requirements in the global market, companies must make demands of their supply chains to ensure that materials, products, parts, and processes meet the demands not only of government agencies but also of consumers and investors.

Recently, the media reported that Lloyds Bank had followed the lead of various U.S. issuers such as Citi, J.P. Morgan, Bank of America, and Capital One in blocking its UK credit card customers across all of its brands from purchasing cryptocurrencies on their cards. Their action was quickly followed by other UK credit card issuers, and while no bank publicly explained the rationale behind this step, consumer groups welcomed the approach.

Is peak oil demand just around the corner? The market used to worry about peak oil supply. Now the focus has shifted to peak oil demand as the industry witnesses a structural decline in demand from the developed world and questions the appetite of the emerging world to grow at the insatiable rates experienced over the past 15 years.

Helping to close the protection gap for vulnerable countries has become a priority for governments and nongovernmental organizations alike. To this end, Chile, Peru, Colombia, and Mexico have recently issued a parametric catastrophe bond to the insurance-linked securities market, obtaining more than a billion dollars in cover.


Scott Stephenson Podcasts

Scott Stephenson

Aerial Insights

Verisk Chairman, President, and CEO Scott Stephenson spoke to A.M. Best about how disasters have unexpected ways of sparking innovation.

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Cyber Exposures Are Business Interruption, Fire Risks


Scott Stransky, assistant vice president, AIR Worldwide, spoke to A.M. Best about how evolving forms of ransomware are triggering business losses as operations halt until systems are restored.

ILS Can Cover Cyber, but on a Parametric Basis


Tom Johansmeyer, assistant vice president and cochief, PCS, spoke to A.M. Best about how investors in insurance-linked securities are looking beyond covering property-catastrophe risk but need more comfort with both new models and new ways to assess perils.

Energy Market Puts the Squeeze on Underwriters


Elizabeth Casas, managing director, energy and insurance, Verisk, spoke to A.M. Best about how lower oil prices and lots of insurance capacity have insurers finding better ways to underwrite their energy business, including a greater reliance on data and analytics.

Tech Changing Commercial Risk Differently Than Personal


Barbara Ingraham, managing director, excess and surplus, Verisk, spoke to A.M. Best about how commercial insurance is benefiting from technology advances that allow insurers to better address complex risks, including identifying and aggregating smaller liability risks.

Additional Podcasts

Superstorm Sandy’s Impact on Flood Risk Assessment and Mitigation


Five years after Superstorm Sandy caused widespread devastation to the East Coast, Marc Treacy, managing director of flood insurance at ISO, spoke to Insurance Journal about how the storm led to improvements in building codes, risk analysis, and resilience strategies.

At the Cutting Edge of Insurance Modeling

Jim Weiss, director of analytic solutions at Verisk, spoke to about new frontiers of modeling for insurance purposes.

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