In its annual London Market forecast for the year ahead, published this week, Kennedys predicts a new wave of climate change litigation as climate science improves and extreme weather events become more frequent, resulting in potentially massive liabilities for the insurance sector and posing new challenges for the insurability of climate-related events. There may also be a rise in reputational damage claims as corporates are held accountable for their corporate social responsibility on the environment.
It warns of UK airlines moving their operations to the EU if the Department of Transport doesn’t devise a post-Brexit solution for access to ‘open skies’ in the EU. It also expects more high-profile corporate collapses with ensuing claims as creditors try to maximise their recoveries.
There may be an increase in sexual harassment claims, with employers’ liability insurers being most at risk. Data subject claims will increase in both volume and value. Issues may arise about construction insurance, with Kennedys already seeing numerous claims with issues about pods constructed off-site.
Deborah Newberry, head of corporate and public affairs at Kennedys, said: ‘As traditional risks look different and emerging risks demand traditional policies to be considered under a new lens, the London Market will need to reassert its ability to adapt and manage the constant evolution of global risk.
‘As has been evidenced in recent years, along with industry-led measures, an understanding of potential market disrupters is vital. Anticipating changing risk perceptions remains key to retaining the unique benefits of the London Market.’
