Study 9 – Emerging Issues and Trends in Insurance - 2025

Cyber Crime

Criminal activities committed using the internet and computer networks.

Denial-of-service (DoS) attacks

Attacks that disable an organization's network and ecommerce services.

Social Engineering

Techniques used to manipulate individuals into divulging confidential information.

Virus

A computer program that copies itself and corrupts files without user consent.

Trojan Horse

A legitimate program with unauthorized code that allows intruders to gain control.

Worm

A self-replicating computer program that spreads through a network without user intervention.

Intellectual Property Theft

The illegal stealing of proprietary information such as trademarks or copyrights.

Intrusion Offences

Unauthorized access to computer systems by exploiting vulnerabilities.

Distributed denial-of-service (DDoS) attacks

Attacks that flood a target's resources using multiple compromised systems.

Extortion

Using ransom to threaten exposure or damage unless payment is made.

Web Defacement

Malicious alteration of a webpage by intruders.

Remote Hacking

Exploiting software vulnerabilities remotely to gain control over devices.

Deepfake Attacks

Synthetic media creations used for impersonation or misinformation.

Multi-vector Threats

Cyber attacks that use various methods to compromise security.

Bot Scams

Using bot malware to control numerous computers for malicious purposes.

Cyber Crime Insurance

Insurance that covers losses from cyber incidents.

Pandemic

A disease outbreak occurring over a wide geographic area affecting a high proportion of the population.

Operational Risk

Risk of loss resulting from inadequate or failed internal processes.

Insurance Coverage Risk

Potential for claims incurred during a pandemic exceeding policy limits.

Climate Change

Long-term changes in temperature and weather patterns affecting environmental conditions.

Generative AI

AI that creates new content, such as text, images, or code.

Cannabis Risk

Insurance considerations associated with legal cannabis production and sale.

Forever Chemicals

Per- and polyfluoroalkyl substances (PFAS) known for longevity in the environment.

Smart Contracts

Self-executing contracts with terms written into code on a blockchain.

Risk Assessment

The process of evaluating risks to determine their potential impact.

Reinsurance

Insurance purchased by insurance companies to manage risk.

Micro Insurance

Insurance with low premiums designed for low-income individuals.

Parametric Insurance

Insurance that pays out based on specific parameters being met.

Real-Time Insurance

Insurance that adapts coverage and premiums to current conditions.

Insurance Frauds

Claims that are exaggerated, falsified, or otherwise dishonest.

Insurance Regulation

Laws and guidelines governing how insurance companies operate.

Epidemic

An outbreak of a disease occurring in a community or region.

Endemic

The constant presence and/or usual prevalence of a disease in a population.

Liability Insurance

Insurance that protects against claims resulting from injuries and damage to people or property.

Commercial General Liability (CGL) Insurance

Insurance that protects businesses from legal claims due to accidents.

Business Interruption Insurance

Insurance that covers loss of income during periods when a business cannot operate.

Evidence of Coverage

Documentation from an insurer confirming policy details and coverage limits.

Negligence

Failure to take proper care in doing something, leading to damage or injury.

Policy Exclusion

Provisions in an insurance policy that exclude certain risks from coverage.

Claims Processing

The handling of claims submitted by insured parties.

Telematics

Technology that uses telecommunications and monitoring to collect data.

Cyber Liability

Legal responsibility related to data breaches and cyber incidents.

Insurtech

Technological innovations in the insurance sector.

Operational Resilience

An organization's ability to withstand and recover from disruptions.

Insurance Underwriting

The process of evaluating risk and determining policy terms.

Best Practices

Methods or techniques that are accepted as superior to others.

Disaster Recovery Plan

A documented process to recover and protect a business IT infrastructure.

Incident Response Plan

A plan for responding to and managing the aftermath of a security breach.

Data Breach

An incident where unauthorized access is obtained to sensitive data.

Insurance Fraud Detection

Methods used to identify fraudulent claims.

Digital Transformation

The incorporation of digital technology into all aspects of a business.

Claim Settlement

The resolution of a claim, usually involving a payout.

Insured Property

Property or assets covered by an insurance policy.

Reinsurance Broker

An intermediary who helps insurance companies obtain reinsurance.

Insurance Premium

The amount paid for an insurance policy.

Risk Pooling

Sharing risk by putting together multiple debts or liabilities.

Emerging Risks

New and evolving risks that insurers may face.

Loss Adjustment Expense (LAE)

Expenses incurred by insurers while investigating and settling claims.

Policyholder

An individual or entity that owns an insurance policy.

Coverage Limits

The maximum amount an insurer will pay for a covered loss.

Business Continuity Planning

Preparation for potential disruptions to business operations.

Privacy Laws

Regulations that govern the collection, storage, and sharing of personal information.

AI in Insurance

Using artificial intelligence to enhance various insurance processes.

Underwriting Guidelines

Criteria set by insurers to assess risk and determine policy terms.

Insurance Market Trends

Current developments and changes within the insurance industry.

Crisis Management

Strategies and processes used to manage emergencies.

Insurance Portfolio

Collection of insurance policies held by an insurer.

Insurance Act

Legislation that governs the insurance industry.

Loss Reserve

Funds set aside to cover future claims.

Market Liquidity

The ease with which assets can be bought or sold in the market.

Asset Protection

Strategies to safeguard an individual's or entity's assets.

What is the RCMPs definition of a cyber crime?

A cyber crime is defined by the RCMP as any crime where a cyber element (that is, the internet and information technologies such as computers, tablets, or smartphones) has a substantial role in the commission of a criminal offence. - One where a cyber element has a substantial role in the commission of a criminal offence.

What form can criminal copyright infringement take?

Theft of intellectual property can include criminal copyright infringement, piracy of software, and theft of digital intellectual property. - Theft of intellectual property

What is identity theft?

A crime in which someone wrongfully obtains and uses another person’s personal data to commit fraud. Personally indentifiable information such as names, addresses, social insurance numbers, bank account numbers, personal health information, and other valuable indentifying data can be used for profit and to the detriment of the victim. - Using someone else’s personal information to commit fraud

What best describes a distributed denial-of-service (DDos) attack?

A DDos attack occurs when multiple compromised systems flood the bandwidth or resources of a targeted system, usually one or more web servers. These types of attacks cause significant challenges for targeted organizations because multiple machines can generate more attack traffic than one machine. multiple attack machines are harder to turn off than one attack machine, and the behaviour of each attack machine can be stealthier, making it harder to track down and shut down. Multiple compromised systems flood the bandwidth of a targeted system.

What defines an endemic?

An endemic is the sustained presence of an infectious disease in a certain region for a significant percentage of the population. Malaria, for example, is endemic in parts of Africa and Latin America. The correct answer is: Infectious disease that is consistently present in a certain region for a significant percentage of the population.

What is blockchain?

Blockchain is a Technology platform that enables distributed ledger technology (DLT) just like with a traditional accounting ledger, the distributed ledger contains transactions that record and track the transfer of assets between two or more parties. A technology platform that enables distributed ledger technology (DLT)

What is a smart contract?

A smart contract is executed between parties on a distributed ledger. It is self-executing with code built right into the contract itself that uses a third-party service, referred to as an oracle, to implement and adjudicate the contract and effect payment to a party when appropriate. A self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code.

What would likely happen if an extreme weather event were no longer classified as an accidental event by a predictable one?

Any catastrophic event or extreme weather event that is no longer considered accidental, but is foreseen and predictable, is inherently not insurable. Insurers may exclude this physical risk from policies, resulting in significant gaps in protection for policyholders, business, and individuals left uninsured. Policyholders will be left with significant gaps in protection.

Cannabis businesses share the same type of risks as which other businesses?

Cannabis companies share many of the same risks as agricultural and manufacturing companies, such as crop failure and product liability. Farms and manufacturers.

How can insurers best mitigate against PFAS (Per- and polyfluoroalkyl substances (PFAS) also known as forever chemicals exposures? (9-31)

Insurers should review the policy wordings to mitigate their PFAS exposures, ensure their pollution exclusions are not subject to misinterpretation or ambiguity, and develop explicit PFAS exclusions. Develop explicit PFAS exclusion clauses

State FIVE (5) preventative actions, related to maintaining and updating technology resources, that businesses can take to reduce cyber risk. (5 marks)

• Install and maintain anti-virus software

• Install and enable firewalls

• Install software patches as soon as they are made available

• Use anti-spyware tools

• Use outside technical expertise when required

• Promptly disable access to the network after employees are terminated

Outline the operational risks for a business during a pandemic? (5 Marks)

Operational risks relate to the loss of people available for work for prolonged periods of time.

Staff absenteeism - Widespread infection rates cause high absenteeism due to staff contracting illness and due to enforced stay-at-home measures.

Management of remote workers: Management policies for supporting quarantined and remote workers must be developed.

Increase in claims: There would likely be an increase in claims, such as business interruption claims. Possibly many people affected might be uninsured or underinsured.

Remote work infrastructure: If employees can work remotely, management must have the necessary infrastructure in place.

Impact to insurance companies: Specific consequences for insurance operations may involve difficulty renewing or writing business and handling claims

State FIVE (5) insurance-specific uses for blockchain (5 Marks)

Customer identity

Underwriting and claims processes

Insurance Fraud

Reinsurance

Micro Insurance

Parametric Insurance

Real-time Insurance

Ari is a risk manager for a food-packaging business with several locations. He must provide a report on the company’s response in the event of a pandemic flu outbreak.

Breifly explain how a pandemic causes economic disruption (5 Marks)

Ari is a risk manager for a food-packaging business with several locations. He must provide a report on the company’s response in the event of a pandemic flu outbreak

Breifly explain how a pandemic causes economic disruption (5 Marks)

• Economic disruption includes widespread economic and infrastructure disruption, including transportation shutdowns, and electricity, communications, and telecommunications slowdowns.

• Disruption to other basic services are expected in the case of a pandemic

• These issues lead to a general loss of productivity and reduced workforce.

• Supply resources could be contaminated, and supply chains may be cut off.

• Many business continuity plans developed prior to COVID-19 focused on internal operations and, therefore may not have adequately considered outside suppliers.

• Alternative suppliers must be considered in different parts of the world

• People may be reluctant to attend in person meetings, using public transportation, travel, or go to crowded areas such as malls, concerts, restaurants, or trade shows.

• The hospitality, restaurant, automobile, specialty retail, and travel sectors may be particularly affected by a pandemic as people defer travel and luxury goods purchase decisions.

• Pandemic influenza has a macro impact on regional and global economies, shifting the way companies conduct their business and affecting the ability to continue operating

Ari is a risk manager for a food-packaging business with several locations. He must provide a report on the company’s response in the event of a pandemic flu outbreak

Briefly explain how the coverage under Ari’s traditional commercial general liability insurance policy is likely to respond (5 marks)

Ari is a risk manager for a food-packaging business with several locations. He must provide a report on the company’s response in the event of a pandemic flu outbreak

Briefly explain how the coverage under Ari’s traditional commercial general liability insurance policy is likely to respond (5 marks)

• Standard policy wordings may not respond to economic losses arising from a pandemic flu.

• Careful analysis of policy wordings is required by Ari and his insurance intermediary to determine whether pandemic coverage is in place for the food-packaging business exposures.

• In the case of a pandemic, the claimant must prove that the wrongful actions of the insured (Ari’s company) caused the infection.

• Often, pandemics leads to class action lawsuits

• Commercial general liability policies respond to third-party claims for bodily injury, or personal injury or property damage.

• However, many contain exclusions if the losses arise from bacteria, contamination, pandemics, pollutants and viruses.

• However, insurers that deny claims based on their interpretation of broadly worded contamination or pollutants may have their decisions overturned in court.

Ari is a risk manager for a food-packaging business with several locations. He must provide a report on the company’s response in the event of a pandemic flu outbreak

Provide an analysis of other coverages available in the market for this type of event (5 marks)

Ari is a risk manager‘s for a food-packaging business with several locations. He must provide a report on the company’s response in the event of a pandemic flu outbreak

Provide an analysis of other coverages available in the market for this type of event (5 marks)

• Availability of coverage: Some insurers will make insurance coverage for pandemics available. This coverage is probably difficult and expensive to obtain and will also include restrictive terms of coverage

• Business interruption endorsement: Some larger hospitality or entertainment companies have obtained programs that contain a business interruption endorsement to cover the time-element loss that would result when a public authority closes the premises after guests exhibit symptoms of a contagious disease.

• BI extension: Some markets offer BI extensions, providing explicit coverage for BI losses due to the outbreak of an infectious disease.

• Contingent BI insurance: Contingent BI insurance typically require direct physical damage to the property of the insured’s suppliers to occur for coverage to be triggered

• Triggering of coverage: When public authorities seal off districts or regions due to infectious diseases, this might trigger coverage.

• Coverage for economic damage: Some markets provide an explicit extension of coverage under property policies for economic damage due to infectious diseases, which do not require actual physical damage.

• Coverage included under economic damage: These extensions may cover some losses arising from a pandemic, such as cancellation coverage, cleanup costs, and crises management, and they are usually subject to sub-limits and time limitations

Directors and officers (D&O) liability insurance

Protection for officers and directors of a corporation against damages resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured. Also called D&O liability insurance.

Cyber crime  

A criminal offence committed through a computer or the Internet that causes loss or damage to the victimís computer system, network, or data; denies access to data or service; or enables further related crimes such as extortion or the resale of stolen data.

Environmental impairment liability (EIL) insurance  

A specialized insurance policy that covers liability and sometimes cleanup costs associated with pollution.

Cyber risk  

Any risk of financial loss, disruption of business, or damage to an organization ís reputation due to a failure of its information technology systems.

Errors and omissions (E&O) insurance  

An insurance form that protects the insured against liability for committing an error or omission in the performance of professional duties. Generally, such policies are designed to cover financial losses rather than liability for bodily injury or property damage.

Product recall insurance  

Insurance that indemnifies the insured for the cost of recalling products known or suspected to be defective.

Which of the following is NOT considered a form of cyber crime?

Consumer complaints

What is a Distributed Denial-of-Service (DDoS) attack?

A flood of meaningless service requests from multiple systems

URL hijacking typically involves

Registering misspelled versions of popular domains

Which of the following is an internal method cyber criminals may use to access sensitive data?

Shoulder surfing

A Trojan horse differs from a virus in that

It appears as a legitimate program

Your company has just suffered a major cyber attack that involved both a DDoS attack and a breach of customer data. As the Risk Manager, you are asked to prepare a report.

Describe the possible risks and consequences associated with this event. What preventative measures could your organization have taken to reduce the likelihood and impact of this breach?

• Definition and implications of a DDoS attack

• Theft of customer data and its repercussions (e.g., identity theft, financial fraud)

• Impact on company reputation, stock price, and customer trust

• Legal exposure due to compromised information

• Business interruption and contingent business interruption

• Preventative measures: stronger firewalls, encryption, staff training, intrusion detection systems

An employee in your organization notices that a website affiliated with your company is redirecting visitors to an inappropriate domain. Further investigation reveals it was a case of URL hijacking.

As part of the IT compliance team, outline the steps you would take to:

1. Mitigate the current risk and stop the redirection

2. Communicate the issue to affected stakeholders

3. Prevent future occurrences of URL hijacking

Expected Key Actions:

• Immediate removal or redirection fix

• Legal action if necessary to reclaim domain

• Customer notice to clarify the company’s role and reassure them

• Strengthened domain registration practices and typo monitoring

• Regular domain audits and employee awareness training