21st Century: Emerging Risks and Innovations
- Climate Change and Catastrophe Insurance: As the world faces growing risks from natural disasters linked to climate change, the insurance industry has developed new ways to provide coverage for these risks. Catastrophe bonds, flood insurance, and parametric insurance (which pays out based on the occurrence of an event, such as a hurricane, rather than the actual loss) have gained prominence.
- Technological Disruption: The rise of big data, artificial intelligence (AI), and machine learning has reshaped the insurance industry by improving underwriting accuracy, predicting risks, and automating claims processing. Blockchain technology also has potential to increase transparency and reduce fraud in insurance transactions.
- The Sharing Economy and New Risks: The rise of the sharing economy (e.g., ride-sharing, home-sharing) has created new insurance needs, leading to the development of specialized coverage for gig workers, car-sharing services, and short-term rental properties.
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