In its latest report, the company provides valuable insights into the risk landscape and highlights new threats that professionals can expect to face.
Building safety legislation is critical
Topping the list of emerging trends is the evolving legislation surrounding building safety. Allianz rates this trend as critical to operations. Since the tragic Grenfell Tower fire in 2017, the issue of building safety has been a cause for concern in the UK. However, new legislation in the country now extends liability periods for claims under the Defective Premises Act from six to 30 years, even retroactively for completed works. Similar measures are also being adopted in Australia. These changes could potentially lead to legal claims against manufacturers and suppliers, impacting specialists involved in construction projects such as architects, engineers, and contractors.
Cyber attacks considerable emerging risk
Cyber attacks are another significant emerging risk identified by Allianz. The insurer’s risk barometer survey reveals that over a third of respondents consider cyber incidents to be their most important business risk for 2023. Cyber attacks are a global phenomenon and have become a foremost concern in 19 countries, including France, India, the UK, and Argentina.
The introduction of new legislation relating to cybersecurity and data protection has fueled the rise in claims in this area. First-party and third-party liability issues arising from social engineering frauds, ransomware attacks, and hacking of transactions are causing alarm among firms seeking to mitigate claims events. Allianz also highlights the increasing prevalence of hackers-for-hire, who are being employed to influence legal cases in multiple jurisdictions worldwide.
Risk for new technologies falling
While the risk rating for the use of new technologies is relatively lower on Allianz’s list, it remains an area of consideration. The growing adoption of generative artificial intelligence (AI) introduces new opportunities and risks. Authenticity and integrity are identified as the key concerns in this regard. Currently, generative AI is most prevalent in sectors such as solicitors and lawyers, certification agencies, real estate agents, construction professionals, architects, engineers, surveyors, auditors, and accountants. The report emphasises that confidentiality should not be compromised, particularly when using service providers like ChatGPT.
The report also focuses on the importance of proper training for works that involve AI and other evolving technologies. It cites a case in which a New York lawyer faced sanctions due to an error-ridden brief drafted with the assistance of ChatGPT, which was used in a personal injury case against an airline company.
Diego Assef, Allianz Global Corporate & Speciality (AGCS) Head of Global Practice Group, Professional Indemnity Claims, stated, “With this publication, our goal is to share this knowledge with customers and bring them up to speed with what’s going on in the market; what we have observed from our claims data, as well as our analysis of emerging risks and trends. We indicate which professionals might be particularly vulnerable, discuss what’s on the horizon, relay key risks and possible developments, and rate them from 1 to 4 according to their level of impact.”
Assef added that as professionals in various sectors face evolving liability trends, it is crucial to stay informed and proactive in mitigating risks associated with these emerging challenges.
