Natalia Zaborovska caught up with Sherry Gonzalez and with Brian Dermond to discuss how businesses need to adapt to new risks and leverage technology to meet future challenges effectively.
The US market is evolving rapidly and is currently experiencing significant digital transformation and sustainability concerns, whilst bracing itself for the knock-on effects from the recent presidential elections. Natalia Zaborovska, Group Head of International at GrECo Group caught up with Sherry Gonzalez, President, International for Hylant and with Brian Dermond, Managing Director, Multinational Practice Leader at Brown & Brown to discuss how businesses need to adapt to new risks and leverage technology to meet future challenges effectively.
Existing and future trends
Zaborovska: What are the most significant trends you are observing in the US insurance market today, and how do you see these trends evolving in the near future?
Gonzalez: The US insurance market is being reshaped by digital transformation, cyber risk, and sustainability concerns. Technologies like AI and machine learning are improving risk assessment, underwriting, and customer experiences, allowing for more personalised insurance products. Meanwhile, cyber insurance is becoming essential as businesses face increasing threats from data breaches and ransomware.
As these trends evolve, data privacy regulations and technological advancements will further influence the insurance landscape. Insurers that can adapt to new risks and leverage technology will be better equipped to meet future challenges.
Dermond: The US remains more litigious relative to the global landscape broadly and continues to evolve as key risks are impacted by various ever-changing considerations. Factors include new and amended regulation, economic shifts in investment, social inflation, natural disasters, and market capacity. Additional volatility is added with the most recent US election, which will undoubtedly have both domestic and global impact.
This environment creates a critical need to consult and proactively plan for expected and potential impacts to each corporation individually across their global risk profile while also uniquely considering key risk components and lines of business.
Risk management strategies to navigate an evolving market
Zaborovska: What are the primary risks that businesses in the US should be aware of, and how can they effectively manage these risks through insurance and other risk management strategies?
Gonzalez: Businesses in the US face significant risks, including the cascading effects of natural disasters, cybersecurity, regulatory compliance, and supply chain disruptions. Cyber insurance and strong cybersecurity protocols are essential due to the frequency of cyberattacks. Compliance with ever-changing regulations is another major challenge, requiring internal compliance programmes and staying updated on laws. Supply chain disruptions necessitate diversifying suppliers and adopting proactive management strategies. The US’s litigious nature means companies should prioritise liability coverage to protect against potential lawsuits.
Dermond: With the exception of a typically heightened litigious environment and a robust privatised Worker’s Compensation scheme, multinational organisations with subsidiary operations in the US may largely apply similar risk management strategies as those utilised for the remainder of their global operation. Infrastructure resiliency planning, supply chain diversification, and crisis management plans all serve to aid in reducing risk and proactively responding in the event of an impact to the business with a particular benefit from a US perspective given the typical risks represented. Utilising existing global programmes deployed in the US paired with unique US coverages, such as US Worker’s Compensation, delivers a blend of efficiency and compliant cover.
This environment creates a critical need to consult and proactively plan for expected and potential impacts to each corporation individually across their global risk profile while also uniquely considering key risk components and lines of business.
Managing Director
Brown & Brown
Staying abreast of US regulatory change
Zaborovska: Are there any recent or upcoming regulatory changes that businesses should be aware of, and how might these changes impact their insurance needs and risk management practices?
Gonzalez: Recent regulatory changes in the US insurance market focus on data privacy, environmental regulations, and labour laws. The expansion of state-specific privacy laws like CCPA requires businesses to modify their data collection and handling practices.
In addition, increased attention to climate-related risks has pushed companies to adopt sustainability measures, affecting industries such as real estate, energy, and manufacturing.
Changes in labour laws around worker rights, wage transparency, and workplace safety can expose businesses to legal risks. Employment practices liability insurance (EPLI) helps protect companies from discrimination or wrongful termination claims.
Dermond: Carriers are concerned about privacy-related incidents, particularly those resulting from violations of the Biometric Information Privacy Act (BIPA) and tracking technology non-compliance. Even for regulation, we continue to see the application of legacy laws like the California Invasion of Privacy Act (CIPA), enacted in 1967, and the Video Privacy Protection Act (VPPA), a 1988 law, to current privacy practices. The CIPA was designed to protect individuals from eavesdropping or recording without consent. The VPPA sought to protect consumers’ privacy by prohibiting the sale of their video rental choices. Both these laws have been applied to recent data collection and sharing practices.
Starting out in the US market: common pitfalls to avoid
Zaborovska: What advice would you give to businesses looking to enter the US market in terms of insurance and risk management, and what common pitfalls should they avoid?
Gonzalez: Businesses entering the US market must understand the country’s complex regulatory environment. Insurance and risk management strategies should begin with thorough market research to understand federal, state, and industry-specific regulations. The US’s litigious nature means companies should prioritise liability coverage to protect against potential lawsuits. Comprehensive cybersecurity measures are also necessary to comply with stringent data privacy laws.
Perhaps the best piece of advice I can give is to engage with local insurance professionals to create a tailored risk management strategy. This will help businesses mitigate these risks and avoid common pitfalls.
Dermond: It is essential that multinational organisations investing in the US partner with a team of insurance professionals equipped to manage and plan for the evolving risks of the business as well as the ever-dynamic US market. US Worker’s Compensation and Property insurance are often key elements of the organisation’s Total Cost of Risk (TCOR) and require regional considerations in addition to a holistic approach to their US and global risk profile. For example, US WC statutory cover varies by state and Property coverage and pricing is heavily influenced by various geographies with many being innocuous and in contrast alternative scenarios triggering limited options due to reduced or non-existent market appetite or capacity. This has been reinforced in Q4 2024 with the recent weather-related events including but not limited to hurricanes causing severe direct property damage as well as business interruption and supply chain challenges. Businesses must factor in this cost of risk – whether in the form of insurance premium or self-retained – into budgetary considerations with planning future expansion and growth.
President
Hylant
Businesses in the US face significant risks, including the cascading effects of natural disasters, cybersecurity, regulatory compliance, and supply chain disruptions. Cyber insurance and strong cybersecurity protocols are essential due to the frequency of cyberattacks.
The role of AI in shaping the future of insurance
Zaborovska: What is the impact of AI on insurance solutions or the way companies work, and what future AI advancements do you foresee having the most impact on the insurance industry?
Gonzalez: AI is revolutionising the insurance industry by automating claims processing, enhancing risk assessment, and improving customer service. Automated claims processing has reduced time and errors, increasing efficiency while minimising fraud. AI-driven risk assessment uses data analytics to offer more accurate underwriting and personalised policies.
Customer engagement is also evolving with AI-powered chatbots and virtual assistants, improving service availability and response times. In the future, AI advancements in predictive analytics and blockchain integration will further improve transparency and risk forecasting, particularly in areas like climate risk and cybersecurity.
In the future, AI advancements in predictive analytics and blockchain integration will further improve transparency and risk forecasting, particularly in areas like climate risk and cybersecurity. As it continues to evolve, insurers will increasingly rely on it to stay competitive in the marketplace.
Dermond: The industry continues to monitor the implications of artificial intelligence and how regulation will seek to address safety issues. For example, the Safe and Secure Innovation for Frontier Artificial Intelligence Systems Act (Senate Bill 1047) passed both chambers of California’s legislature but was vetoed by the California Governor. This California bill was one of the first significant legislation attempting to regulate the development and deployment of advanced AI models.
Additionally, efforts are expected as regulators evaluate how best to protect public safety. While the immediate effect of new SEC cyber guidance appears limited to directors’ and officers’ liability policies, some predict the SEC requirement to report cyber incidents publicly will increase the frequency of class action lawsuits.
Zaborovska: Thank you both for your time and insights.
About Sherry Gonzalez, President, International, Hylant
With 34 years in the industry, Sherry Gonzalez holds a senior leadership position in Property & Casualty, driving retail performance and shaping Hylant’s international growth strategy. She sets strategy and blends business development and operational structure skills to maximise revenue growth, optimise talent, and leverage efficiencies.
About Brian Dermond, Managing Director, Multinational Practice Leader, Brown & Brown
With more than 18 years’ experience in multinational insurance, Brian leads the Brown & Brown Multinational Practice. He is responsible for the design, coordination and implementation of multinational insurance solutions for Brown & Brown multinational customers as well as the management of the global Brown & Brown network.
About Hylant
Hylant is one of the largest privately held insurance brokerages in the United States. Established in 1935, they specialise in comprehensive risk management, alternative risk financing, business insurance, employee benefits consultation, small business insurance solutions, and personal insurance, serving clients nationally and internationally. For four generations, Hylant has delivered exemplary service based on honesty, respect and hard work.
About Brown & Brown
Brown & Brown, Inc. is the sixth largest independent insurance brokerage in the USA. They provide risk management solutions for Retail, Programmes and Wholesale Brokerage, offering insurance products and services to businesses, corporations, governmental institutions, professional organisations, trade associations, families, and individuals. With more than 80 years of proven success, Brown & Brown is one of the industry’s most powerful and influential leaders.
Natalia Morris
Group Head of International
T +61 44 777 9001
