AI, cyber threats and climate change as among the most significant emerging risks facing the global insurance sector according to a new report from Moody’s, which warns that increasingly interconnected exposures are challenging traditional approaches to underwriting and risk management.

The credit ratings agency’s latest Insurance Emerging Risk Radar identifies around 20 emerging risks that it says will shape the future of the insurance industry as economic, technological and societal trends continue to evolve.

The interactive tool maps risks according to their potential severity, expected time horizon and the insurance sectors they are most likely to affect. Among the most significant risks identified are physical climate risk, cyber risk and artificial intelligence. Rather than viewing these in isolation, the report highlights how emerging threats can interact and compound one another, creating increasingly complex challenges for insurers.

The report also identifies a broad range of additional risks spanning geopolitical developments, demographic change, economic pressures and technological innovation, illustrating how insurers are facing a wider and more interconnected risk landscape than in the past. The study highlights a growing need for insurers to strengthen risk modelling and build resilience as technological, geopolitical and environmental threats become more closely intertwined.

According to Moody’s, the radar is intended to help insurers better understand the relationships between emerging risks and the transmission channels through which they can affect businesses. By connecting these risks visually, the company says insurers can gain a clearer view of how changing exposures may influence different parts of their organisations over time.

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