Pressure has never been greater for general counsel of insurers and their legal teams dealing with fast-moving current issues, whilst simultaneously trying to anticipate the problems on the horizon. Inevitably the challenges of Covid-19 have dominated 2020. With these set to continue and the end of the Brexit transition period looming, the industry has more to tackle as we move into 2021.

Insurance is one of the UK’s flagship exports around the world, so what issues should legal teams in this hugely important sector be preparing for over the coming months?

Cyber Security and Data Protection

The fast pace of digitalisation, both within the insurance industry and for policyholders, keeps cybersecurity and data protection high on the agenda for 2021.

Claims following data breaches continue their upwards trend, requiring insurers to reassess and adjust their risks as the market develops.  The move to home working during the pandemic has also altered the threat landscape.  There is likely to be a lag before we see clear patterns emerge in an insurance context, but the claims will come.  This is against the backdrop of the UK Information Commissioner imposing the largest fine in October 2020 for a cyber-security breach affecting personal data.

Also of concern are growing numbers of data subject access requests within claims generally. These can easily lead to satellite litigation or damages claims if mishandled. Further, regulatory investigations and enforcement are now more joined up following a recently updated Memorandum of Understanding between the Information Commissioner’s Office and the Financial Conduct Authority (“FCA”).  Of note is the requirement for those insurers providing cover for cyber risks to comply with the ‘silent cyber’ mandate during 2020 and 2021, making it clear what risks are covered and excluded.  Finally, in common with other businesses, with increased reliance on technology, and in particular data analytics to obtain greater insight, insurers face increased scrutiny given the volume of data, including special category and financial data, that they process.

Regulatory Pressures

Insurers in the UK and globally are facing greater scrutiny under evolving regulation and legislation. Regulators continue to apply pressure in areas such as Delegated Authority, Good Conduct and Culture. Alongside that, as outlined in the FCA Business Plan, Covid-19 has heightened expectations for the fair treatment of customers.

Brexit is the final twist to a perfect storm of regulatory challenges for insurers. In September 2020 the FCA reopened the temporary permissions regime (TPR) notification window. A joint letter from the Prudential Regulation Authority and FCA followed in October 2020 urging insurers to complete preparations for the end of the TPR, irrespective of whether a deal is reached between the EU and UK. The letter highlights the need for contingency planning to ensure continuity of service to customers with EU-based liabilities. It urges insurers to contact relevant European authorities to apply for permission to continue operating in Europe under the ‘savings provision’ arrangements, allowing firms up to two years to apply for permission to transfer policy liabilities out of the UK.

Claims Tsunami

History has taught us to expect a resurgence in claims across all classes as we head deeper into recession.  We have seen only the tip of the iceberg of the types of Covid-related claims that will emerge once people have time to assess the potential breaches of duty or contract to pursue.

There are already claims arising out of a lack of adequate PPE, closure of businesses with resulting business interruption and challenges to both government and insurer decisions. However, for insurers themselves and corporate policyholders, the virus is also creating additional risks from a Directors and Officers’ liability perspective. Directors acting in good faith and in real-time under ever-evolving circumstances could face liability claims for decisions affecting their businesses, staff and customers. Brokers’ negligence claims are also likely to increase, given issues around obtaining suitable cover for both Covid and Brexit related matters.


The insurance industry has shown remarkable resilience in past times of crisis, and this will be crucial again to navigate the current climate. Insurers are adapting their business models to reflect the fast pace of change, particularly around digitalisation, and will need to continue to do so just to maintain, let alone gain market share. There is no silver bullet though, and the true challenge will be how to address these issues with the right amount of risk exposure whilst meeting customers’ needs – two very different bedfellows.  General Counsel and their legal teams will be vital to finding this balance.

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About the author:

Claire Bowler

Claire Bowler is a partner at DWF and is based in the firm’s London office. She leads the firm’s Insurance Sector, DWF’s largest global sector, and sat on DWF’s main Strategic Board from 2016-2019. Claire has long been recognised for her expertise, her contribution to the City and for championing the progress of women, most recently winning Insurance Lawyer of the Year at the inaugural Women in Insurance Awards in 2019. She is commended as a leading Insurance lawyer in the major legal directories and works with many partners across DWF’s business to coordinate a strong multi-disciplinary approach to help clients navigate the complexities and ever-changing legal landscape of the insurance sector. DWF has been named by the FT as one of the Top 10 most innovative law firms in Europe. It is the UK’s largest listed legal business, offering specialist insurance services and commercial legal services to clients globally.