By Terri Brennan – Region VII RVP
When most people think about insurance, they think about protecting homes, vehicles, businesses, or personal belongings. What many don’t realize is that insurance is also one of the world’s largest forecasting industries. Every day, insurance professionals evaluate risks that may not fully materialize for months, years, or even decades.
Throughout history, the industry has adapted to many significant changes.
Think about the following –
- Invention of the Automobile: New liability exposures
- Commercial Aviation: Entire new set of coverage forms
- The Internet – creation of cyber risks no one really imagined a generation ago. Today the pace has really changed. Rapid technology advances, evolving consumer behavior, economic and environmental changes.
Cyber threats, catastrophe volatility, and technological disruption are some of the issues that insurers must pay very close attention to as they reshape how business and individuals manage future risks.
For those beginning a career in insurance, understanding emerging risks provides an important perspective: Insurance is not simply about what has happened in the past. It is about preparing for what comes next.
- Real-World Example #1: California Wildfires and Property Insurance
Wildfires have become a major challenge for insurers operating in certain regions of the United States. In California, repeated catastrophic wildfire seasons have led many insurers to reassess their risk appetite, pricing models, and underwriting strategies.
For consumers, this has sometimes meant higher premiums, reduced carrier options, or changes in coverage availability. For insurance professionals, these events demonstrate how environmental conditions can directly influence underwriting decisions and market dynamics. Catastrophe volatility remains one of the industry’s most closely monitored trends.
- Real-World Example #2: Supply Chain Disruptions
Recent years have shown how a disruption in one part of the world can affect businesses thousands of miles away. Like – manufacturer delays, shipping routes, lack of raw materials, or labor can all have significant financial consequences.
Imagine a manufacturer that cannot receive a critical component needed to complete its products. Even though the business itself may not have suffered direct physical damage, operations can still be disrupted. These experiences have increased awareness of contingent business interruption exposures and broader supply chain vulnerabilities. Industry groups continue to monitor supply chain complexity as an important emerging risk.
- Real-World Example #3: Drones in Everyday Business
A decade ago, drones were largely associated with hobbyists. Today, they are used to inspect roofs, survey construction sites, monitor agricultural operations, capture aerial photography, and assist emergency responders.
While drones create efficiencies, they also create new exposures. What happens if a drone damages property? Who is liable if equipment fails? What coverage is needed when drones are used for commercial purposes?
These questions illustrate how insurance evolves alongside technology. As new products and services enter the marketplace, insurers must determine how to evaluate and insure risks that have little historical data available.
Why are some risks so hard to insure? Have you explored questions like:
- Why do some carriers leave certain states?
- How do carriers decide what is an “acceptable” risk?
- What data exists to support underwriting decisions?
- Could self-driving vehicles reduce accidents?
- Who is responsible when something goes wrong?
Catastrophe losses remain one of the most significant drivers of underwriting and pricing changes across the industry.
Our insurance industry has never been solely about protecting what exists today. Its true value lies in recognizing what could happen tomorrow. As technology evolves, weather patterns change, and the global economy becomes increasingly interconnected, the ability to understand emerging risks will remain one of the most important skills for the next generation of insurance professionals.
The risks that will shape the industry ten years from now may be very different from those that dominate today’s discussions. New professionals entering the field will likely encounter exposures, products, and technologies that do not yet fully exist.
As I mentioned before – Insurance is not just about protecting what exists today. It is about preparing for what comes next.
Isn’t this what makes our career so interesting? You need to promise yourself to stay on top of the emerging issues and never stop asking questions!