digital insurer Wefox, both of which saw great support from investors recognizing their disruptive potential. The acceleration of digital dependence will have implications for the customers that the insurance industry serves as well. It is worth remembering that the technological modernisation of industry is owed as much to the growing sophistication of the threats it faces as to the convenience that digital solutions bring; a surge in cyberattacks has come in tandem with the past two years’ shift towards remote working. Ransomware and the threat of “triple extortion” exposing sensitive client data have led to multiple US states banning ransomware payments by government and government-linked entities. As a consequence, data protection is rising as a priority for insurers, as is D&O scrutiny relating to board decisions on cybersecurity. The rapid evolution of the tech sector is certain to produce further concerns for insurers this year. While we can only guess at some of these developments, it would be worthwhile for insurers to consider the likelihood of increased regulatory oversight of AI, especially as its use in financial services grows more widespread. The EU’s draft AI regulations, published last April, are a clear sign of things to come in this area. Beyond D&O insurance, we can expect to see the issues of air quality and emissions become a more significant cause of exposure for corporations. One of the most notable pollution-related cases of the past year was R (Richards) v Environment Agency, concerning the 2020 death of Ella KissiDebrah, where the UK High Court demonstrated its willingness to hold the Environment Agency to account for harmful emissions caused by a private business. Modernisation andDigital Transformation As with all industries, the insurance sector is in the midst of a macro-level shift towards greater adoption of digital solutions. Much of this can be owed to the COVID-19 pandemic and subsequent rise of remote working models, which 85% of insurers credited as a driving force behind the digitisation of their operations. In addition to strengthening the operations of existing market players, this digitisation of insurance – and the new levels of consumer accessibility that it has helped to foment – has already spurred the rise of new tech-savvy insurance start-ups like UK car insurance provider Marshmallow and German ESGandClimate Change One of the largest risks faced by global communities and businesses is the threat of climate change and the damage it stands to cause worldwide. Lawyer Monthly has previously identified this as a hotbed for new litigation, particularly following last year’s COP26 summit and the Glasgow Climate Pact, which we expected to spur further Net Zero corporate commitments as well as actions by shareholders to hold directors and officers accountable for failure to comply with these stated goals. So far, these predictions have been borne out. 2021 saw a wave of successful shareholder challenges brought against multinational corporate executives, forcing greater transparency in emissions data and investment strategies in addition to the removal of directors and board members found to be at fault. This carries obvious implications for the D&O insurance market, for which climate change has unsurprisingly become the number one concern. 60 MAY 2022 WWW.LAWYER-MONTHLY.COM One of the largest risks faced by global communities and businesses is the threat of climate change and the damage it stands to cause worldwide.
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