The insurance industry is facing mounting pressure to adapt as risks evolve more rapidly than existing models can accommodate, according to John Lopes (pictured above), executive vice president at Nationwide.
Speaking with AM Best at the RIMS Riskworld conference, Lopes said the interplay between emerging threats is reshaping how insurers manage exposure and deliver protection.
“The emerging risks that are out there [are] pretty well documented at this point,” Lopes said. “But I think what’s interesting is... they’re all interconnected in a lot of ways.”
He cited climate risk, cyber threats, artificial intelligence, and geopolitical instability as the top concerns currently shaping the risk environment. Among these, climate risk remains particularly challenging.
“Everything else sort of has human intervention and human connection,” Lopes said. “Mother Nature is hard to really dictate... and she’s moving quickly.” He noted that the rising frequency and severity of events are occurring within a regulatory framework that is “really hard to keep up with how quickly the models are changing.”
Lopes said this trend has implications for affordability and accessibility, especially outside the excess and surplus (E&S) lines market. “We really wonder about affordability for customers in the long run at the rate that this is going,” he said.
“The viewpoint on climate risk is really we’re spending a lot of time on resiliency... to really help our customers and help the insureds really protect themselves,” Lopes said. He noted that beyond offering insurance, “there’s also an obligation for the industry to really help with the resiliency... so that basically we can have a sustainable market over time.”
Cyber risk continues to expand and will remain a priority, Lopes said, both in terms of managing exposures and delivering solutions. The increasing integration of artificial intelligence adds a new layer of complexity, bringing both operational efficiencies and fresh vulnerabilities.
“AI has embedded itself and is growing rapidly,” he said, noting that it introduces new exposures insurers must address.
(AC) Nationwide has already begun deploying artificial intelligence in its operations through partnerships such as the one with CompScience and Swiss Re. This collaboration uses computer vision AI to analyze workplace environments and identify potential hazards in real time.
According to Nationwide, the approach has reduced workers' compensation claims by 23%, suggesting that AI applications are not only changing how insurers assess risk but also how they support prevention efforts on the ground.
Geopolitical tensions, meanwhile, feed into other types of risk. “That will also play out in the risk that we talked about from an AI and a cyber risk [perspective],” Lopes said.
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