Many issues are keeping short-term insurers up at night as they charter the unexplored territories of artificial intelligence, land expropriation without compensation, the sharing economy and changing weather patterns that are hard to predict with today’s underwriting models. Law firm Norton Rose Fulbright has been trying to understand the magnitude of the liabilities that some of its clients in the insurance sector will face in a few years.

"The concern is that some insurers are not anticipating the liability as they should," says Kelcey Smith, one of the firm’s senior associates. Driverless cars, for example, will change the way that car insurance is assessed and priced considerably, says Smith. "How do you allocate liability if the car makes decisions completely autonomously? Who do you hold accountable for faults: the software developer? The owner? "We don’t have answers to all the questions, but it is clear that the automotive risks are changing considerably." Auditing fi...

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