JLT Specialty launches new global automotive division
JLT Specialty, a subsidiary of Jardine Lloyd Thompson Group, has launched a new global automotive division amid the increasing appetite for autonomous vehicles, significant advances in vehicle connectivity, changing consumer behaviour and tightening environmental regulations.
Through a partnership with Resilinc, a global provider of supply chain risk and resiliency solutions, JLT will offer an innovative insurance solution which links cutting-edge supply chain analytics to enable the insurance market to provide a breadth of business interruption coverage that has previously been unavailable.
"The auto industry is changing rapidly, driven by technological innovation and increased complexity of supply chain on a global scale," Matt Grimwade, head of automotive at JLT Specialty, commented.
"The traditional silo approach from the insurance industry is insufficient to deal with the breadth of product risks arising from connected and autonomous vehicles. JLT tackles this issue by providing a more joined up solution to reduce ambiguity and avoid duplications and gaps in insurance cover.
"Through robust data and analytics coupled with our specialist expertise, we will provide auto makers and their suppliers with innovative insurance solutions to meet these risk challenges."
With the accelerated pace of connectivity and autonomous vehicles, JLT projects a significant rise in cyber and technology risks whether it is hacking driverless cars or electronic communication errors and breakdowns from the complex electronic systems. To address these growing concerns faced by manufacturers and suppliers, JLT’s automotive division will deliver a seamless insurance solution that will respond to the convergence of a broad range of risks from cyber, technology, products liability to product recall.
According to the company, the clients will be able to access real-time monitoring of 45 types of events that have the potential to disrupt auto makers’ and their Tier1/Tier 2 suppliers’ complex global supply chains. By mapping the entire global supply chain, JLT’s clients will be able to monitor potential failure points and improve supplier resiliency.
As automotive products become more technology focused, there will be an inevitable shift from human to product liability. According to KPMG, product liability insurance will rise from 0 percent in 2017 to 57 percent in 2050 of total auto losses to cover the autonomous technology in vehicles. Auto manufacturers will assume more of the driving risk and associated product liabilities. In addition, interconnected component parts from numerous suppliers and territories as well as greater complexity of supply chain are likely to lead to higher product risk exposure.
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