Ignored cyber threats, mounting SRCC and a stark economic warning for 2100

At the Association of British Insurers annual conference, execs emphasized that many growing small and mid-sized businesses don’t have risk managers, leaving them exposed and flying blind.

“They’re focused on running their business and creating commercial value,” Neil Galjaard , Markel 's managing director UK, explained in a piece published on Insurance Age . “What we’ve got to do as an industry is invest in things that help them manage their risk, mitigate that loss from happening in the first place, which is great for us and great for them.”

The panel agreed that risks are evolving fast, and that one looming threat, in particular, isn't getting nearly the attention it deserves. Despite a flood of troubling headlines about hacks, ransoms, etc., only 8% of businesses have dedicated cyber insurance, and many don’t actually see the threat at all. The industry has an opportunity — not just to sell policies, but to educate and empower businesses to protect themselves.

At the same time, a new survey from Insurity shows trust in AI-driven underwriting and claims handling is slipping, with 44% now saying they’d be less likely to buy from an insurer using the technology. That skepticism is growing across generations — except for Gen Z. Millennials, in particular, saw a big drop in AI support, from 41% last year to just 26% now. Transparency concerns seem to be a major factor.

"Understanding these generational differences is crucial for insurers aiming to enhance their AI strategies," Insurity's Chief Revenue Officer Sylvester Mathis, III. explained. "Insurers who tailor their messaging and demonstrate AI’s real-world benefits will be well-positioned to drive adoption and enhance customer relationships across all demographics."

Here are the results from a poll we ran on this topic:

Of course, cyber risks are just a part of the shifting risk landscape. Strikes, riots, and civil commotion (SRCC) has been blowing up in a big way, as well, with claims having surged some 3,000%, according to Swiss Re 's Nikhil da Victoria Lobo . A recent Reinsurance News News poll revealed that political and social divisions have emerged as the primary driver of this increase, with 55% of respondents citing them as the leading cause.

Clearly, with economic instability and social tensions rising, businesses are reassessing their coverage — and insurers must step up with smarter solutions.

And climate change doesn't seem to be going anywhere either. In the latest warning shot, a new Congressional Budget Office study predicts that rising temperatures could slash U.S. GDP by a whopping 4% by 2100, with even grimmer worst-case scenarios.

Meanwhile, insurers grappling with mounting losses from natural disasters are re-evaluating coverage in high-risk areas, but dodging climate costs may not be a viable long-term strategy. From pricing to prevention, the industry faces tough choices ahead.

Diving into some of the troubling numbers around warming temperatures, the latest AI-powered analysis from ZestyAI just issued a warning that wildfire risk is no longer merely a West Coast problem. A staggering $2.15 trillion worth of U.S. residential property is at high risk of wildfire damage, the report showed, with 4.3 million homes facing significant exposure, extending well beyond traditionally fire-prone regions.

California still leads in total exposure ($1.16 trillion), but states like North Carolina, Kentucky and even South Dakota are seeing wildfire risk surge. With the Wildland-Urban Interface expanding and conditions worsening, insurance availability is becoming a growing concern — 1 in 8 homeowners is already underinsured, and that number is expected to climb.

“Wildfires are threatening more properties than ever before, with billions of dollars in exposure even in areas many people don’t associate with fire risk," ZestyAI Found and CEO Attila Toth explained in the report. "Yet, too many homeowners are finding themselves uninsured or underinsured just as these disasters become more frequent and severe."

Indeed, there's plenty to wrestle with these days.

As co-authors Alan Demers, CPCU, AIC of InsurTech Consulting and Stephen Applebaum of Insurance Solutions Group explained, emerging risks, shifting consumer expectations and outdated models have created widening gaps that threaten stability and trust. Those gaps include buzzwords like climate resilience, protection, trust, transparency, talent, marketing and distribution, to name just a few of the standouts.

"Closing these gaps is vital for the insurance industry and its contributions to the economy and consumer livelihoods," they wrote in a piece for the Insurance Innovation Reporter . "Minding the gap is foundational for industry success in 2025 and beyond."

While there are no shortage of reasons for concern, the fact remains: Our industry is gearing up for 2025 like a startup with fresh VC funding — momentum is high, and big moves are on the horizon. Life insurers are doubling down on asset management, P&C carriers are recalibrating for growth and macro pressures are forcing reinvention at record speed.

"We are anticipating a wave of bolder organic and inorganic moves focused on driving growth, regaining relevance, and building resilience," explained Mick Moloney, the lead author of Oliver Wyman's "Growth, Relevance, Resilience" report.

The compelling call-to-action proposes 10 "to-dos" recommendations for leading CEOs to keep up the pace and drive reinvention in the industry.

Insurance, the authors contend, has a golden opportunity to redefine its reputation, attract top talent and make its value crystal clear. Meanwhile, M&A is set to explode as insurers chase scale and resilience in an unpredictable landscape. Bottom line? The next year isn’t about playing defense — it’s about making bold, strategic bets to stay ahead.