The Risks of Hazard

After returning from a springtime vacation, and a hiatus from Risks of Hazard, I didn’t have to look hard to find topics to write about:

• Its hail season now, and I have some new stuff to share on that.
• Wildfire season is here now, too, and there is a post on that, coming soon.
• And, Houston has been flooded again so we need to revisit the challenges of underwriting flood in that city.

But, deciding what to write first was easy once I saw this video from AM Best at RIMS. Meg Ryan hosts an executive panel discussion that includes Kelly Lyles (XL Catlin), Rob Shimek (from AIG, who has provided much foundation for this blog in the past couple months – thanks Mr. Shimek!), and Inga Beale (Lloyd’s). 

Over the past weeks, I’ve talked a bit about innovation in insurance (my trip to San Francisco and a look at VC’s perspective), and concluded that while there is no sign of true disruption (i.e. in the Uber sense), there is plenty of innovation to be excited about.

Just to be clear on what “disruptive innovation” means, here is what it might be like. Actual, real disruption in insurance would mean that in the space of a few years, the $3+ trillion insurance industry would need to find something else to do with their cash and investments because almost nobody would need their services and products anymore.

Last week I wrote about the event in San Francisco I went to where we explored innovation in insurance with Big Data. The point I made was that Big Data and new software are innovating insurance incrementally, but not disruptively. Since then, I’ve been wondering if I was selling the innovation short. Is there actually something disruptive happening? There are plenty of articles out there suggesting there is, so what am I missing?