InView Spring/Summer 2016

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20 InView | An independent eye on Insurance MARKET WATCH Businesses are constantly seeking new and innovative ways of maintaining a competitive advantage. One way to stay ahead of the field is to monitor the horizon for legislative, social, and economic change and either insulate against any negative effect, or maximise any benefits. Weightmans’ Market Affairs Group not only monitors the horizon, but actively engages the market to effect change. In this edition of Market Watch, we take a look at some upcoming issues with global implications. 2. TECHNOLOGY AND CYBER RISKS With our lives becoming increasingly reliant on the benefits delivered by digital technology such as the internet, smart devices, drones and autonomous vehicles, we need to remember that these technologies constitute one of the biggest threats to our global economy. Cyber crimes amounting to millions of pounds can now be committed by teenagers from the comfort of their own bedrooms. There is also a marked increase in the volume of industrial and national hacking and cyber terrorism incidents raising serious questions about the security of our online systems and identities. These digital technologies bring with them familiar risks, albeit with the potential to manifest on an unimaginable scale. What is clear is that insurers have a place at the forefront of this digital evolution and the need to engage with the government to create a regulatory framework has never been greater. Essential perhaps, if insurers are to realise the opportunities for significant premium growth without underestimating the risks that such technologies bring. 1. EU GENERAL DATA PROTECTION REGULATION (“THE REGULATION”) In previous editions of Market Watch we advised of the forthcoming Regulation which was still being debated in the European Union Parliament. The Regulation has now been agreed and will come into force sometime during the first half of 2018. It applies directly to all EU member states and will have significant implications for commercial organisations conducting business within the EU. The Regulation: creates a pan-European data protection board; requires mandatory notification of data breaches “without undue delay” (where feasible within 72 hours of awareness) and provides guidance on when an organisation must notify regulators and data subjects; 3. BREXIT David Cameron has called the Referendum on Britain’s membership of the European Union for voting on 23 June 2016. The ABI in response released a statement (full text can be found at www.abi.org.uk) where Huw Evans, ABI Director General said “as a global insurance centre of excellence, the UK has a major influence in shaping the rules of the EU. And as the undisputed financial services centre of the EU, the whole of the UK is able to benefit from the jobs, tax revenue and economic prosperity this position brings.” Whilst the outcome of the Referendum is far from certain, clients may wish to prepare their businesses in advance of the Referendum so as to be best placed to react should the outcome be “Brexit.” creates a tiered sanctions regime with fines for a breach being up to 4% of the offender’s global annual turnover; applies to all organisations conducting business in Europe, regardless of whether they are domiciled within the EU with many needing to appoint a representative in the EU; establishes in legislation the principle of the “right to be forgotten.” Now that the final provisions are published, insurers need to be quick to ensure that their processes and systems are updated to comply, as a breach of the new Regulation has the potential to be catastrophic. © Copyright. Weightmans LLP 2016. All rights reserved.
Issue 3 | Spring/Summer 2016 21 4. SOCIAL MEDIA We’ve alluded to social media having a massive impact on business in general as well as the insurance sector. However, with an increasing number of insurers having a global presence, issues of brand and reputation have never been more important. With the ability for your customer’s complaint or your service failing to go “viral”, travelling around the world in a matter of hours, it has never been more important for you to develop a coherent and well balanced social media policy. Social media is the new battleground for customers. You need to be well prepared. MAG Weightmans’ Market Affairs Group (MAG) is responsible for all forms of market affairs activity on behalf of the firm. MAG can report and inform insurers on the latest market developments and translate this into actions, objectives and strategies providing real value. If you would like to contact MAG please email: marketaffairs@weightmans.com Bavita Rai, Innovation & Client Affairs 0121 200 3499 David Johnson, Political Affairs 020 7822 7146 Doug Keir, Scottish Affairs Kurt Rowe, Market Affairs 0141 375 0869 020 7822 7132
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InView Spring/Summer 2016

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