How Future Tech Could Change Risk and Loss: Allianz Report

Technology is expected to be a major driver of liability claims in the years ahead – cutting frequency and increasing new threats such as cyber, product liability and recall risk, according to a report published by Allianz Global Corporate & Specialty (AGCS).

So-called smart factories, for example, will likely reduce workplace accidents, and driverless cars are expected to dramatically reduce accident rates over time.

At the same time, business models in the digital economy “are more complex and without borders,” which make “liability harder to apportion and claims more complex to settle,” said the report, titled “Global Claims Review – Liability in Focus.”

“Autonomation is likely to lead to increased product liability for machinery and component manufacturer and software providers in particular,” Allianz said.

“The risk landscape for companies is constantly shifting with liability risks on the rise globally,” said Alexander Mack, AGCS board member and chief claims officer. “New technologies such as the internet of things, autonomous mobility or 3D printing will create fundamentally new liability scenarios for companies in almost every sector.”

The AGCS report identifies what it sees as the major technological trends that will influence liability claims:

Autonomous driving. The advent of autonomous cars will reduce accident rates, shift liability from drivers to manufacturers and lead to a drop in car ownership “in favor of motor fleets, car-sharing and driverless taxis.” This could lead insurers to move away from providing single annual motor insurance policies to millions of drivers and instead be providers of large policies for manufacturers and fleet owners and operators.

Sharing economy. The sharing economy will make liability more complex and difficult to apportion. “For example, a road traffic accident featuring an autonomous car share vehicle could involve the vehicle manufacturer, software provider and the fleet operator, as well as third parties involved in the accident…,” the report said.

3D printing. This technology is widely used, “especially for creating prototypes and bespoke parts in industries like aviation, automotive and the medical sector…,” the report said, noting products made on 3D printers are untested, using new materials and techniques, in new applications.

Cyber. Companies are concerned about the growing sophistication of cyber attacks, but many underestimate “the impact of technical IT failure, human error or even rogue employees…,” the report noted. Data protection rules are becoming tougher as governments seek to bolster cyber security.