By Anna Lopata – ANZIIF Senior writer

Cyber incidents, climate disclosures, regulatory scrutiny and rising litigation costs are reshaping liability risk. For organisations, the challenge is no longer simply responding to claims but preparing for them.

The liability landscape is becoming increasingly complex. Regulatory reform, emerging technologies, economic pressures and evolving stakeholder expectations are changing not only how claims arise, but also how they are managed and resolved.

For insurers, brokers and businesses, the challenge extends well beyond technical liability exposures. Organisations are being asked to navigate a world where accountability is increasing, claims are becoming more contested and the cost of getting it wrong is rising.

According to Luanna Philippe, Head of Claims at QBE in New Zealand, several structural shifts are fundamentally reshaping liability risk across the broader Asia-Pacific region.

Liability claims become more regulated

The days of straightforward liability disputes are becoming increasingly rare. Today’s claims often involve multiple parties, evolving legal duties and greater regulatory scrutiny.

Philippe says legal and regulatory reforms have altered how responsibility is allocated across a range of sectors.

“From a claims perspective, we’re seeing three structural shifts are reshaping liability risk,” she says.

“The first is regulatory and legal reform, which is materially changing liability frameworks.

“In New Zealand, changes such as the Contracts of Insurance Act and proposed proportionate liability in construction are fundamentally altering how responsibility is allocated, moving away from ‘last man standing’ outcomes toward a more considered and granular attribution of risk.”

At the same time, disputes involving multiple parties are becoming increasingly common, particularly in construction, infrastructure and professional services, where questions of responsibility can be highly technical and heavily contested.

Directors and senior leaders are also operating under greater scrutiny than ever before. Regulatory agencies are taking a more active approach to enforcement, while governance expectations continue to rise across financial services and corporate sectors.

The result is a liability environment that is becoming harder to predict and more difficult to navigate.

New risks are emerging faster than organisations can respond

While traditional liability exposures remain, newer risks are rapidly moving up the agenda.

Cyber and privacy incidents continue to present significant challenges, particularly as organisations become increasingly reliant on digital systems and data-driven operations.

“Many organisations still underestimate how quickly a cyber or privacy incident can escalate, not just into regulatory or reputational issues, but into real, out-of-pocket costs to investigate, contain and recover from the event,” Philippe observes.

“There is often little understanding of the full costs, including IT forensics, legal advice, customer notification and downtime. It is no longer an IT issue, it’s firmly a Board-level concern.”

Alongside cyber risk, AI is emerging as a new area of uncertainty. As organisations increasingly incorporate AI into decision-making, customer interactions and operational processes, questions around governance, accountability, bias and errors are becoming more prominent.

Climate-related liability is also evolving. While much attention has focused on physical risks, governance and disclosure obligations are becoming an increasingly important source of potential claims. Organisations face growing expectations around how they communicate climate commitments, assess climate-related risks and disclose their positions to stakeholders.

For liability professionals, these exposures share a common characteristic: regulation and legal frameworks are still evolving while the risks themselves continue to develop.

Economic pressures are amplifying claims

Economic conditions are adding another layer of complexity to liability claims.

Inflation has increased the cost of legal representation, expert evidence, repairs and labour. At the same time, financially stressed claimants are often more willing to challenge decisions and pursue disputes.

According to Philippe, these pressures are influencing both claims behaviour and insurer responses.

“The market is seeing increased claim frequency in financially stressed sectors, alongside higher claim severity, driven by inflation in wages, repair costs, legal fees and expert evidence.

“At the same time, claimants are more willing to pursue disputes and challenge outcomes, particularly where financial pressures heighten sensitivities.”

This environment is encouraging insurers to focus on earlier intervention and more disciplined claims management. There is a greater emphasis on early triage and more proactive resolution, recognising that prolonged disputes can materially increase overall claim cost.

Just as important, these approaches support better outcomes for customers and enabling businesses to resolve liability claims more quickly so they can get back to operating with confidence and financial certainty.

As litigation costs continue to rise, resolving issues early is increasingly viewed as both a financial and strategic priority.

The organisations performing best

Despite the changing environment, Philippe does not believe the organisations responding most effectively are necessarily those undertaking large-scale transformations.

Instead, success often comes down to consistent execution of the fundamentals.

Effective outcomes increasingly come down to strong risk management. Early identification of issues, clear escalation, defined ownership and good documentation all help reduce the likelihood and impact of claims.

Insurers play a key role by supporting customers with education, raising awareness of risks, and providing practical solutions to help prevent issues before they arise.

“Those performing well are typically those that stay disciplined in the fundamentals: early identification of issues, disciplined escalation, clear ownership and strong documentation,” Philippe says.

“They treat claims as part of a broader risk environment and engage early with insurers and advisers to shape outcomes.”

By contrast, organisations that adopt a reactive approach often find themselves dealing with higher costs, longer resolution timeframes and less favourable outcomes.

One of Philippe’s most compelling observations is that the gap between strong and weak performers is not necessarily driven by innovation.

“The gap is less about transformation, and more about consistency of execution,” she says.

That consistency may become an increasingly important competitive advantage.

Finding long-term resilience

Philippe also argues that successful claims management ultimately remains centred on people.

Customers facing liability disputes are often navigating unfamiliar and stressful circumstances. In those situations, communication and transparency can be just as important as technical expertise.

“The most effective approach is grounded in principled and consistent decision-making, where technical defensibility is matched with a clear focus on fair customer outcomes and regulatory expectations,” she explains.

Building trust requires more than achieving the right technical outcome. It also depends on ensuring stakeholders understand the process, the rationale behind decisions and what happens next.

Philippe says organisations that perform strongly recognise that claims handling plays an important role in long-term resilience.

“How a claim is handled is just as important as the technical outcome, particularly when it comes to building long-term trust and resilience.”

As liability risks continue to evolve, that combination of technical expertise, preparedness and trust-building may become one of the industry’s most valuable capabilities.

The themes of complexity, accountability and preparedness are likely to feature prominently at this year’s ANZIIF New Zealand Liability Conference, where industry leaders will explore how organisations can respond to an increasingly challenging liability environment while maintaining strong customer and stakeholder outcomes.

As MC, Philippe hopes attendees leave with practical ideas they can implement immediately, stronger industry connections and a renewed focus on collaboration.

“We spend so much of our day-to-day focused on delivery that we don’t always get the chance to ‘get on the balcony’ and look at the bigger picture,” she says. “This is one of those opportunities.”