Insurers are the largest institutional investors in Europe, and the sector contributes significantly to economic growth and development, shaping the backbone of the European financial industry. A comprehensive insurance industry provides the ability to transfer, pool and mutualise risks – keeping a country economically stable and helping it thrive.

Losses from Hurricane Maria, Irma and Harvey and other natural disasters closer to home like Ophelia, the worst storm in Irish history, have been felt by households and businesses worldwide. Leaving a trail of destruction behind them, culminating in an estimated £72bn price tag, has led global insurers and reinsurers to issue profit warnings, prompting predictions of the costliest year yet.

However, after a pricy Q3, the global insurance industry is looking to prosper in 2018 with an improved outlook on previous years, raising 2018 earnings in the sector by 9 – 25%, allowing strengths to fast outweigh negative factors. The mature economies of Europe and North America are moving towards recovery, showcasing better economic prospects and the emerging markets are also prospering, due to improved standards of living that further increase insurance requirements. That is not to say that the industry is without its difficulties, as insurance companies are met with a marketplace that continues to change on a macroeconomic, social and regulatory level, with ongoing challenges including changing business models, cyber-risk and change management acting as persistent hurdles.

As the EU referendum results were revealed on Friday 24th June 2016, the FTSE plummeted as investors feared a long-term downturn. While there is substantial change ahead for the market and it may be hard to anticipate the terms and accurately prepare for the UK’s exit from the EU, or to dampen worries about market disruption, brokers believe it will not hurt London’s market position as a hub for re/insurance activity. Nevertheless, the capitals place in the insurance landscape is certainly changing as the UK’s regulatory and legislative frameworks adjust. It is still unclear how certain laws like the Solvency II Directive, concentrating on minimum capital requirements, will be altered or amended when the UK exits the EU. These changes can offer an opportunity for the risk adverse insurance industry to review growth prospects in Europe and further afield.

Reinsurers who aid insurance payments for large claims for incidences such as storms theoretically do not need passporting rights to function cross-border in the large marine, aviation and transport industries, but because of different national regulations reinsurers based in Britain may find that it gets more expensive and difficult conducting business with certain EU markets, leading for calls to carry on current guidelines under a future UK/EU trade deal. With a 32% share of the global market, the European insurance industry is the largest in the world and has previously responded to profound challenges with a high degree of agility and innovation, so despite current obstacles like Brexit, we are looking to 2018 with hope and anticipation.

Numerous factors impact on the insurance industry, including economic and political conditions and elements such as economic growth, interest rates, exchanges rates and inflation also have an influence on the future outcome and performance of insurance companies. Most insurers are reacting to changes outside the industry by modifying their internal operations and commercial tactics allowing them to remain on the cutting edge. For example, the CEO of Nordic Guarantee, Johan Brinkenberg, has implanted numerous changes, transforming a struggling business into a successful one, offering bonds and guarantees to over 2,600 clients.

Insurance and guarantees are especially important for the construction sector, where companies often need to provide their clients with performance bonds, and the pace of change in this area is unmatched by any other industry. Despite ongoing Brexit-related uncertainties around regulation and how insurers operate, near-term prospects for the construction industry have improved with 1.2% growth predicted in 2018 and 2.3% the following year. Technology, drones and augmented reality is changing the face of construction sites and transforming the industry as we know it. Will our buildings and homes be built by robots in the future? What effect will this have on risk profiles and guarantees? We are currently nearing the end of 2017. Let’s not forget that at the end of 2006 the iphone, ipad, Kindle, Uber or Android did not even exist, but once technology gets its teeth into a sector it doesn’t let go. Modern insurance companies like Nordic Guarantee communicate and collaborate effectively with their clients, embrace technological change and understand the shifting nature of claims and correspondingly, premiums, in this ever-evolving industry.

Business insurance is an expense every business, irrespective of its sector, size or stage, needs to include in its budget. Many view it as an avoidable outlay, or as a luxury instead of a necessity, resulting in the underinsurance problem we see among many SMEs. However, insurance is an indispensable investment, not an additional cost, and needs to be frequently revaluated to ensure companies are protecting the expanding scale of the business. Businesses require the support and backing that good industry-leading, innovative bond consulting insurance service affords them. It is relatively easy for SMEs to find and purchase the policies that largely fit their needs, but the right partner can add substantial value to a business owner. Insurance companies such as Nordic Guarantee that are keen to inform and work with customers on a one-to-one basis, rather than looking for the highest premiums, are the ones you should look to work with.

For almost 100 years the insurance industry had stayed relatively unchanged, but over the past ten years new digital initiatives and business models have appeared. Whilst many industries acknowledge the need to change, acting on it is a huge challenge. No business, including insurance, is exempt from today’s prompt and persistent developments witnessed in technology and customer expectations. The insurance sector causes a ripple effect on other industries, both within financial and non-financial jurisdictions, and the European market depends heavily on the health of this central industry.

Insurance companies can’t predict the future, but they can help businesses and SMEs prepare for it. Insurers who understand that all businesses are unique and can anticipate and respond quickly to change are the ones to liaise with. Insurance is the key that gives you the peace of mind you need to deal with unforeseeable circumstances, enabling you to take calculated risks and focus on growing your company.