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According to maps of the Ukraine-Russia war, about 20% of Ukraine is a war zone. Eric Andersen (pictured), president of global broker Aon, said one thing frustrating Ukrainian businesses is that global insurers and investors tend to see the whole country as a war zone – even though about 80% of the country remains largely peaceful.

“A real problem on the ground in Ukraine is that the local insurance market can’t get war cover,” said Andersen. The New York-based leader was recently in Australia where he spoke to Insurance Business.

“Essentially, the global market kind of walked out of Ukraine during the invasion,” he said. “So if you are trying to build a building, a house or a school, you can’t get cover for materials or anything in construction.”

However, through an agreement with the US International Development Finance Corporation (DFC), he said Aon now provides war insurance in the peaceful areas of Ukraine for construction projects, education facilities, small businesses and agriculture.

“It’s all available in the local economy and the local brokers are selling it and it’s doing exactly what it’s supposed to,” said Andersen.

Before the war

Before the war, Andersen said Aon was the largest broker in the country.

“We had a chance to sit with President Zelensky during the UN General Assembly a couple of weeks ago,” said Andersen.

He said a focus for Zelenksy is keeping the financial services sector going.

“So that when peace ultimately breaks out, there’s a functioning economy because that’s what he’s worried most about,” said Andersen.

“A brand-new way to disburse money”

Andersen said this war insurance offering is “a brand-new way for the DFC to disburse money.”

“We said to the DFC that what we really need, rather than doing one off projects,” he said, “is if they can get comfortable supporting one of the local insurers then what you’re doing is you’re supporting the insurance company as it deploys capital into their local market for more risk.”

He said the DFC is “quite particular” about how it lends money.

“We got a little bit lucky in that Fairfax, which is the big Canadian insurer, had a subsidiary on the ground in Ukraine and so we partnered with that local insurer and put them together with the DFC,” said Andersen.

He said together they went through the DFC’s criteria, including what risks they would cover and in what parts of the country.

“Essentially the DFC committed US$50 million in a reinsurance contract behind the balance sheet of a local insurer,” said Andersen. “It was a really good partnership between the public and private entity and it is putting money to work where it’s needed.”

He said this is also “creating more knowledge” among some European countries more accustomed to making aid donations.

“What they really would rather do is help find ways to build and sustain the economy through the local capability, rather than just kind of airdrop in something,” said Andersen. “We’ve been talking to a number of them about either upsizing the program or taking part of the risk themselves, so that when peace breaks out, the DFC can get out and the private sector can jump back in.”

The world’s “unsettled” companies

In the same interview with IB, the Aon president said his meetings with clients showed that many businesses around the world are “unsettled” by the major risks they now face and are looking to brokers for more help.

“Big companies and mid-sized companies in Australia, Europe, Asia and North America – they seem more unsettled than they have been in a long time,” Andersen said.

He said this generalised uncertainty is not country specific and he’s seeing it in clients worldwide.

“No matter where you go around the world, they’re all struggling with what they view as a more risky world and they’re looking for advice and they’re looking for capital and trying to figure out what to do,” he said. “I think there’s a lot out there who are unsettled and they’re looking to us [brokers] to be able to give them better insight and tools,” said the Aon leader.

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Global re/insurer MS Amlin has appointed Jo Hine and Andrew Downes (pictured above) as independent non-executive directors.

Hine will serve as chair of the risk and solvency committee, pending regulatory approval. Hine brings a background in finance, capital, and risk, having held senior roles at Hiscox, Tokio Marine Kiln, QBE European Operations, and Aioi Nissay Dowa Europe, a sister company to MS Amlin.

She is also currently an independent non-executive director at Arch Insurance International and a non-executive director and trustee for the charity Publish What You Fund.

Downes joins the board after a 20-year career as an audit partner at Deloitte, where he managed audit and advisory projects for UK and international clients, including multiple Lloyd’s syndicates, brokers, and Lloyd’s itself.

Downes also serves as a non-executive board member and trustee for the Pimlico Toy Library, a children’s charity in Westminster, and has represented the audit profession on the Institute of Chartered Accountants of England & Wales Insurance Committee and Lloyd’s Working Group.

Simon Jeffreys, chair of MS Amlin’s Board, said Hine and Downes both bring a strong understanding of the Lloyd’s market, enhancing the board’s expertise as the company seeks to strengthen its competitive position.

“I am delighted to welcome Jo and Andrew to MS Amlin. Both bring extensive expertise and a deep understanding of the Lloyd’s market, making them valuable additions to the board as we continue to grow our business and strengthen our competitive position,” Jeffreys said.

Last month, the Lloyd’s re/insurer also announced the appointment of Emma Snowdon as head of capital management and investments.

In this role, Snowdon oversees the company’s capital modeling, capital strategy, and investment portfolio management, all aimed at supporting MS Amlin’s long-term growth objectives and financial resilience.

Snowdon is based in London and reports to chief financial officer Jessie Burrows.

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The partnership between ILS Bermuda and Bermuda College, established in 2017 to develop a talent pipeline for Bermuda’s insurance-linked securities (ILS) industry, will continue into 2025.

According to a report by the Royal Gazette, this collaboration aims to enhance students’ knowledge of the ILS, insurance, and reinsurance sectors, providing educational and work experience opportunities that help students build essential industry connections.

Since its inception, the initiative has expanded to include paid summer internships funded by industry organizations exclusively for Bermuda College students.

These internships offer hands-on experience in industry settings, with five organizations participating in 2024: Bermuda Monetary Authority, Marsh Management Services (Bermuda), Hiscox ILS, Integral ILS, and Price Forbes.

ILS Bermuda’s year-round educational program includes multiple learning modules. Students attend panels and networking events at the annual ILS Convergence conference and participate in lunch-and-learn sessions where they engage directly with industry professionals.

The program also offers a mentorship component, where mentors assist students with practical skills such as resumé building, LinkedIn profile development, scholarship and internship applications, and interview preparation, as well as other career development queries

LaVonne Smith, ILS Bermuda education vice-chair and senior vice president at Resolute Global Partners, said the organization is focused on providing a structured program that helps Bermuda College students gain relevant industry skills, along with network connections facilitated through mentorship, lunch-and-learn sessions, and internships.

Ali Arouzi, interim vice president of academic affairs at Bermuda College, acknowledged the impact of the initiative, noting that students have benefited from pairing with industry mentors and gaining internship experience. The lunch-and-learn sessions, he said, help students refine their career interests.

ILS Bermuda chairwoman Jo Stanton (pictured above) added that supporting and mentoring young Bermudians is a core part of the organization’s mission.

“We had an excellent group of students participate in our various education initiatives this year and we look forward to them continuing and completing their studies and joining Bermuda’s risk industry in the near future,” Stanton said.

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It wasn’t too long ago that using artificial intelligence (AI) to greatly enhance human ability was the stuff of futuristic speculation.

For global companies like Davies, AI is now an indispensable part of business strategy. The specialist claims and professional services provider recently appointed Paul O’Brien (pictured) as its first group chief AI officer, a move that solidifies its intent to harness the technology for growth.

O’Brien spoke to Insurance Business about the key AI initiatives Davies plans to roll out across its multinational operations.

The biggest challenges chief AI officers like him face? Compliance and meeting customer expectations.

“A key consideration for us is ensuring we fully understand regulatory obligations across different regions,” said O’Brien, who also serves as chief technology officer in global solutions for the organizations.

“In the UK, the frameworks for AI are more advanced, but in North America, there’s significant variation in AI regulations across states.”

Beyond meeting regulatory requirements, O’Brien also highlighted the challenge of aligning its enhanced capabilities with client expectations.

“We have a diverse range of clients, each with a different appetite for AI in their claims process,” he said. “As AI capabilities evolve, it’s important to bring our clients along on the journey, adjusting the use of AI to suit their specific needs.”

Keeping up with exciting innovations in AI

In a personal capacity, O’Brien said his main challenge was keeping up with the

rapid shifts in AI. “When we started discussing AI a year ago, the capabilities were very different,” he reflected. “The rate of change and making sure we stay in touch with it, understanding the positives and negatives for the business, is definitely a concern.”

A key example of this was the emergence of AI-generated video and voice, which could soon become widely accessible. “Imagine being on a Teams call a year from now and not knowing if it’s really me or AI-generated in real-time,” O’Brien illustrated.

There are also concerns about AI being misused, particularly in areas like fraud. O’Brien emphasizes the need for businesses to understand both the positive and negative impacts of AI, and to implement appropriate safeguards.

As AI continues to evolve, O’Brien is cautious but optimistic about its role in business. The initial fear that AI would replace human jobs has largely been tempered by the realization that AI is more about augmentation than replacement, though he noted that the current state of AI shows it’s not yet a “finished product.” Challenges like hallucination in large language models show that AI still has limitations.

For now, regulatory frameworks provide the necessary guardrails to ensure that businesses like Davies implement AI in a way that is both innovative and responsible.

“While regulation can be seen as a potential slowdown to innovation, I think that’s actually a real positive,” O’Brien said.

Davies’ AI strategy – what does the organization aim to achieve?

When generative AI started gaining momentum, notably with the rise of ChatGPT in the public sphere, it became clear that AI would change the game for Davies.

“We recognized its significant impact on our operations and saw the need to reassess our AI strategy for the future,” said O’Brien.

As a private equity-backed business undergoing rapid acquisitions, Davies needed to look inward at its AI capabilities, especially considering the wide range of industries it serves, from insurance to consulting to forensic accounting. The early task, according to O’Brien, was simple but crucial: “What are we doing in AI?”

He quickly discovered that various departments within Davies were already engaging with AI to some degree. “We were doing lots of automation and AI-type activities, they just weren’t necessarily all talking to each other,” O’Brien said.

If they were to maximize the potential of AI across the organization, Davies needed to unify their efforts under a centralized strategy. This is how the group chief AI officer role came into being.

“The role grew out of that need to ensure we have a holistic view of everything going on in AI,” O’Brien explained, “and to make sure we’re delivering the best results for our clients and ourselves.”

Davies’ AI strategy is divided into three pillars: compliance and sustainability, business optimization, and product enhancement.

The company is exploring several projects to enhance its products and services:

1. Continuing to develop its Laurie platform, which is part of Davies’ claims processing solutions, and incorporating more AI capabilities into it
2. Building AI features into Davies’ SaaS platforms
3. Leveraging generative AI tools like ChatGPT to enhance internal productivity and efficiency, such as by automating tasks like document analysis and meeting summarization
4. Developing generic AI capabilities like document ingestion and understanding, and then implementing those across multiple Davies products and services to drive efficiencies
5. Exploring the use of AI-generated video and voice, while also being mindful of the potential risks and impacts these technologies could have on the business, such as in mitigating fraud.

Davies’ key focus is using AI to augment and empower Davies’ employees and clients, rather than replacing them, and doing so in a safe and compliant manner.

“What excites me most about AI right now is how it’s augmenting, rather than replacing, people,” O’Brien said. “There were fears it would replace jobs. But what we’re seeing is AI helping people work more efficiently. For example, in areas where teams deal with large documents or vast amounts of data, generative AI is ideal for quickly locating specific information, like clauses in legal contracts. It streamlines workflows, making tasks easier and more manageable.

“As employees become more familiar with generative AI tools like ChatGPT in their personal lives, they expect to use similar tools at work. Giving them access to these capabilities in a safe, controlled way is fantastic.”

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The International Union of Marine Insurance (IUMI) released its 2024 analysis of the global marine insurance market through its annual IUMI Stats Report.

This report provides insights into the health of the marine insurance sector, considering factors such as global economic trends, trade, and shipping. Data for the report is sourced from IUMI and various external agencies, with analysis and commentary provided.

In 2023, global marine insurance premiums reached $38.9 billion, marking a 5.9% increase from 2022. Growth was observed across all business lines, driven by a rise in global trade volumes and values, increased vessel values in the hull sector, and higher oil prices boosting activity in the offshore energy industry.

Ocean hull premiums totaled $9.2 billion, a 7.6% increase from the previous year. This growth was attributed to increased vessel activity, higher vessel values, and reduced market capacity.

Despite low claims and favorable loss ratios in all regions, 2023 saw some deterioration in loss ratios, which can be linked to inflation impacting repair costs. Fires on large vessels continued to be a concern.

Cargo insurance premiums rose to $22.1 billion, up 6.2% from the previous year. This increase reflects continued market development and global trade growth. Loss ratios in the cargo sector were positive and started at their lowest levels since 2017.

The offshore energy sector reported $4.6 billion in premiums for 2023, a 4.6% increase. This was driven by rising oil prices and increased activity, though this has not yet led to a significant rise in claims. Loss ratios remained positive but started from a higher point than in previous years, and claims costs are expected to take several years to fully develop.

The report also includes an update on IUMI’s Major Claims Database, which has been collecting data since 2013. Contributions come from 28 national insurance associations, with 6,400 cargo-related observations representing $10.9 billion in losses and 10,300 hull-related observations amounting to $14.6 billion in cumulative losses. The data is analyzed by loss severity, frequency, location, and cause.

IUMI secretary general Lars Lange (pictured above) noted that 2023 saw positive market development across all lines of marine insurance.

“Looking ahead, there are a number of headwinds likely to make themselves known this year and beyond. Geopolitical tensions and the continuing attacks in the Red Sea area and the Russia/Ukraine war are significant. Our transition to a cleaner and greener society will also impact heavily as will the continuing – and often tragic – increase in large vessel fires,” Lange said.

IUMI will continue to monitor the challenges facing the marine insurance sector and collaborate with relevant agencies to ensure underwriters are informed and equipped to meet the evolving needs of global trade.

Lange also acknowledged the work of IUMI’s Facts & Figures Committee and its data partners in compiling the Stats Report and Major Claims Database.

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CNA Financial Corporation announced it expects to report pretax net catastrophe losses of US$143 million for the third quarter of 2024.

Approximately 75% of these losses are attributed to four major events, including US$55 million from Hurricane Helene. The remaining US$35 million in losses is spread across several other events from the quarter.

The catastrophe losses consist of US$127 million in the commercial segment and US$16 million in the international segment. CNA stated that the combined ratio impact of these catastrophe losses aligns with its third-quarter average over the past five years.

In addition, CNA expects to report pretax net catastrophe losses related to Hurricane Milton, estimated between US$25 million and US$55 million, in its fourth-quarter 2024 results.

CNA’s chairman and CEO, Dino E. Robusto (pictured above), expressed concern for those affected by the recent hurricanes and other catastrophic events during the third quarter.

“We are all saddened by the devastation and destruction from Hurricanes Helene and Milton as well as other catastrophic events during the third quarter. Our thoughts are with those that lost loved ones, homes, and businesses and everyone suffering and working to recover,” Robusto said.

CNA is scheduled to report its full third-quarter 2024 results on Nov. 4, before the market opens.

Preliminary figures for the first three quarters of 2024 show global economic losses from natural catastrophes at US$280 billion, with insured losses reaching US$108 billion, according to Gallagher Re.

While overall losses remain slightly below the recent 10-year average of US$309 billion, insured losses have exceeded the decadal average of US$102 billion by 5%, primarily driven by a higher frequency of low-to-mid-size events with losses of US$2 billion or less.

Gallagher Re notes that much of the insured losses have been attributed to “non-peak” perils such as thunderstorms, floods, and wildfires, which have accounted for 68% of overall economic losses and 76% of insured losses.

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Insurance associations from the UK, Canada, Australia, and New Zealand have urged Commonwealth leaders to prioritise the economic impact of extreme weather at the upcoming Commonwealth Heads of Government Meeting (CHOGM) in Samoa.

This follows a Global Insurance Protection Gap Forum held in Sydney on Oct. 18, where the four organisations, alongside insurers, regulators, and Australian government representatives, discussed the increasing gap between insured and uninsured losses caused by extreme weather.

Combined, these associations represent insurers responsible for writing approximately US$200 billion in gross annual premiums.

Global insurance protection gap

During the forum, participants noted that climate change is exacerbating the frequency and severity of natural disasters, widening the global insurance protection gap. Rising populations and expanding development in high-risk areas, such as flood zones, were identified as contributing factors.

Attendees called for greater collaboration between governments and insurers to manage future risks and reduce the protection gap. Additionally, they cautioned that excessive taxes and levies on insurance premiums could further reduce access to affordable coverage.

“We are now at a crossroads, with a new government in post and a review of the planning system underway. It’s vital that decisions are taken for the long-term and made for the benefit of all. That’s not just investing in flood defences but also changing where and how we build. Action is needed now, not in the future when the challenge will be ever greater,” she said.

Canada’s insured losses from extreme weather events

IBC president and CEO Celyeste Power shared Canada’s experience with multiple natural disasters last summer, including floods and wildfires, which resulted in $7 billion in insured losses over five weeks.

“More frequent and intense disasters, coupled with ongoing development of areas at high risk of extreme weather and growing asset values, are widening the gap globally between those who can afford insurance in high-risk areas and those who can’t – often leaving society’s least wealthy unable to rebuild and recover when disaster strikes,” he said.

“By working closely together, our insurance representative bodies are committed to doing their bit to help reduce risk from natural hazards and protect our families and communities,” he said.

He also emphasised the shared goal of minimising risks from natural hazards and maintaining insurance affordability.

“By reducing the protection gap, we keep communities safe, reduce the costs to taxpayers and ratepayers and maintain insurance capacity and affordability,” Faafoi said.

Munich Re reports that from January to June 2024, the global average temperature was approximately 1.5°C higher than pre-industrial levels, with record-breaking temperatures occurring worldwide.

The rise in temperature has led to increased losses from natural disasters, particularly in Africa, where recent events highlight the need for the insurance industry to address climate change risks.

Global losses from natural catastrophes in the first half of 2024 amounted to $120 billion, with insured losses making up about half, or $62 billion. In its report, Munich Re suggests that, based on current figures, insured losses could exceed the $100 billion mark by the end of 2024, which has become a significant point of discussion since 2023.

Munich Re attributes most of the global losses (68% of economic losses and 76% of insured losses) to severe thunderstorms, floods, and wildfires, categorized as “non-peak” perils. In Africa, natural disasters caused economic losses of $500 million in the first half of 2024.

The region’s insurance protection gap remains substantial, with penetration levels typically below 1%. According to Munich Re, floods in East Africa during March and April accounted for the most significant losses.

Munich Re’s data shows that economic losses in Africa were lower in the first half of 2024 compared to previous years, but past events such as the 2023 Morocco earthquake and 2022 floods in South Africa and Nigeria caused much higher damage. In 2023, economic losses in Africa reached $14.6 billion, primarily driven by the earthquake in Morocco.

To assess preparedness for climate risks, Munich Re conducted a survey of 500 South African business representatives across various industries, including insurance, agriculture, and transportation. The survey found that 86% of participants were concerned about the economic effects of climate change on their organizations.

While the level of concern has increased over the last decade, the willingness to invest in preventive measures is still lower, though visible.

Cost remains the major barrier

Munich Re’s survey also asked homeowners about their response to increasing risks from weather-related disasters. The majority, 57%, expressed interest in expanding their insurance coverage to protect against these risks, but cost remained the primary barrier preventing them from doing so.

Looking ahead, Munich Re highlighted several key actions insurers can take to address the growing risks posed by climate change. These include improving data intelligence and portfolio steering, particularly through tools like Munich Re’s Location Risk Intelligence software, which offers climate risk analytics for thousands of locations.

Insurers are also encouraged to adjust pricing models to reflect the increased frequency and severity of natural catastrophes, as well as to promote risk mitigation efforts across the value chain.

Munich Re acknowledged that while exposure growth, such as urban development, has contributed to increased losses over time, climate change has also intensified the frequency and severity of natural disasters.

The company referenced studies, such as those from the World Weather Attribution organization, which suggest that climate change has made certain weather events, like the 2022 KwaZulu-Natal floods, more frequent.

Munich Re said that extreme weather will continue to impact society, and it is essential for insurers and other stakeholders to work together to adapt to these changes and protect people and economies from the consequences of climate-related risks.

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The Capgemini Research Institute’s World Life Insurance Report 2025 highlights ongoing challenges in the life insurance industry, particularly in meeting modern customer experience expectations.

Legacy technology is cited as a key barrier to progress. However, a small group of life insurers globally have managed to deliver significantly improved customer experiences, earning “best-in-class” status.

The report noted that these insurers have achieved a 38% higher Net Promoter Score (NPS), an 11% lower expense ratio, and 6% higher revenue growth compared to their mainstream competitors over the past three years.

The report also notes the pressures life insurers are facing, including high inflation, economic uncertainty, and waning consumer interest. Between 2007 and 2023, market penetration in mature markets declined by 33%.

Customer dissatisfaction is prevalent, with half of policyholders expressing disappointment with their experience, particularly in areas such as product offerings, onboarding, servicing, and claims processes.

Challenges arise throughout the customer journey. During onboarding, 35% of retail policyholders find insurance terms too complex, while 27% are dissatisfied with lengthy application processes. After purchasing a policy, 25% of both retail and group customers report frustration with long wait times, and 23% are displeased by the lack of self-service options for making policy changes.

The claims process, often impacted by limited digitization, poses further challenges. One-third of retail policyholders face difficulties with complex claims applications, and 27% cite a lack of empathy during claims handling.

Younger customers’ demands

The report reveals that younger policyholders, aged 18-40, experience more frustration throughout the insurance journey compared to those aged 41-60. Issues include slow and complex onboarding, limited communication channels, and insufficient self-service options.

Additionally, younger customers demand more claims flexibility, with 42% pointing to inflexible payout structures as a key concern, compared to 26% of older policyholders.

While insurers acknowledge the need to redesign onboarding, servicing, and claims experiences, only 9% have developed processes that capture data from multiple sources to deliver personalized experiences through preferred customer channels.

Samantha Chow (pictured above), global leader for life insurance, annuities, and benefits at Capgemini, noted that life insurance is moving from a “must-have” to a “maybe” proposition. She emphasized that insurers must move beyond a product-driven approach to focus on customer engagement, particularly with younger generations.

“Many insurers are struggling with legacy technology or investments that have failed to deliver the target returns. The path forward is a customer-centric transformation that draws inspiration from the best-in-class by embedding AI-augmented, human-touch service into core processes,” Choe said.

Efforts to improve customer experience have stalled for many insurers. According to the report, only 41% of insurers met or exceeded their transformation goals. Initiatives were often hampered by unexpected integration challenges, a lack of alignment with business objectives, and insufficient skilled resources.

Generative AI in insurance

Despite these setbacks, a small group of best-in-class insurers have embraced new technologies, including generative AI, to enhance customer service. These insurers have automated many aspects of underwriting and claims processing, enabling more efficient onboarding and improving the overall customer experience.

For example, 78% of best-in-class insurers have automated underwriting processes, compared to only 15% of mainstream insurers, and the same percentage offer policyholders access to self-service portals, versus 13% of other carriers. Moreover, 56% of best-in-class insurers provide AI-assisted claims services, compared to just 3% of mainstream insurers.

The report also highlights the transformative potential of generative AI but notes significant talent challenges. While 67% of best-in-class insurers are ready to leverage generative AI, only 25% of mainstream insurers are similarly prepared.

A shortage of skilled talent, particularly in areas such as behavioral science, experience design, and AI prompt engineering, remains a significant hurdle.

The success of future transformation efforts will depend on insurers’ ability to effectively implement new technologies and attract, develop, and retain the necessary talent. Those that can combine advanced technological tools with skilled professionals will be well-positioned to lead the industry toward a more customer-centric approach, it was stated.

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