麻豆社

AI and drone warfare will force a 鈥渃omplete reimagining鈥� of how conflict risk is calculated and insured, the chief executive of Lloyd鈥檚 of London has warned, because traditional assumptions about how wars escalate may no longer hold.

Patrick Tiernan, who runs the 337-year-old insurance marketplace, told the Big Boss Interview that autonomous weapons and AI-driven decision-making could remove the warning signs and diplomatic pauses that have historically allowed insurers to adjust cover as conflicts intensify.

鈥淲hen we talk about the way war is insured at the moment, it assumes that it鈥檒l build up, that there鈥檒l be breaks in there, and that you can increase the cover,鈥� he said. 鈥淚t鈥檚 very possible that won鈥檛 be the case as there is more drone warfare, more artificial intelligence in the decision-making. So we鈥檙e going to have to completely reimagine how we cover that.鈥�

His warning comes as governments increase defence spending and NATO allies reassess their military commitments. Tiernan said Lloyd鈥檚 must ensure it has the capacity to insure growth in defence, energy and infrastructure, while being clearer about which forms of defence it supports.

He said the current risk environment is unlike anything in Lloyd鈥檚 history, with physical infrastructure, data and cyber systems, financial services and the international rules-based order all under pressure at the same time. 鈥淲e are very underprepared for the risks we鈥檙e facing because we rely on things that maybe won鈥檛 be there tomorrow,鈥� he said.

Tiernan also warned that the 鈥減rotection gap鈥� between economic losses and what is actually insured is widening. He said businesses and governments can no longer assume the state will step in when disaster strikes, arguing that high debt levels mean governments may not have the same financial firepower they had in the past.

He called on governments to spell out what they will and will not protect, so private capital can price the remaining risk. Businesses, he said, are being 鈥渨ilfully ignorant鈥� if they fail to understand their exposure.

A major state-backed cyberattack remains one of Lloyd鈥檚 realistic disaster scenarios and could be 鈥渄eeply crippling鈥� to the global economy, Tiernan said. He added that take-up of cyber insurance remains too low, particularly among European SMEs, despite policies offering prevention and resilience support as well as financial cover.

On the Strait of Hormuz, Tiernan said Lloyd鈥檚 drew on lessons from previous Gulf shipping disruption and the Black Sea closure during the Ukraine war. Insurance capacity remained available, he said, with crew safety rather than the price of cover the main factor affecting shipping.

He also argued that the insurance industry, and perhaps the wider economy, has lost some of its appetite for calculated risk since the financial crisis. Pointing to opportunities in undersea data centres, autonomous vehicles and AI-led drug development, he said: 鈥淭he risk of missing out is greater than the risk of overstepping.鈥�

On climate, Tiernan said Lloyd鈥檚 has added US flood, severe convective storm and fire to its realistic disaster scenarios, with flood, fire and drought all on an upward trajectory. He defended Lloyd鈥檚 continued insurance of legal, unsanctioned fossil fuel activity, but said the market should use its capital to support new energy technologies including small modular reactors, nuclear fusion and renewables.

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