Risk managers are having to rethink the way they structure their strategies as interconnected risks reshape the threat profile and exposures.

Speaking in Birmingham at the Airmic Annual Conference one leading underwriter said the risks were now at a point where the complexity and correlation is demanding a new approach.

Rohan Davies, managing director, London Market at Markel International  said the risk environment required flexibility and focus.

“Interconnectedness is now a defining feature of modern risk, and it requires a different approach,” he explained. “Traditionally, risks could be assessed and transferred in relatively self-contained ways. Today, a single event can trigger impacts across multiple parts of a business – operational, financial, regulatory and reputational, often simultaneously.

“Risk managers must therefore take a more holistic, enterprise-wide view of exposure. It is about understanding how risk flows through the business, where dependencies sit and how different scenarios can combine.

It also means engaging earlier and more closely with partners across the value chain – including insurers – to structure programmes that reflect that complexity.”

Davies added: ” Risk managers do not think about risks as discrete and singular occurrences. One event means multiple cascading events. A cyber event can lead to physical loss, reputational damage, client impact, regulatory scrutiny. You do not come to Markel just to place your cyber risk; you come to be protected from a cyber event and all that goes with it, such a scenario-based thinking, open dialogue between brokers, clients and insurers. Expert judgement still matters; years of underwriting and risk transfer experience mean something. We have to be able to challenge model outputs.”

The interconnection came as Davies said risks have fundamentally shifted and were redefining the need for closer ties throughout the insurance transaction.

“The risk environment is undoubtedly becoming more complex, but the real change is the nature of the challenge,” he added. “Risk is no longer discrete or contained; it is now moving across geographies, supply chains and balance sheets in ways that is harder to isolate and model. This means the role of the risk manager has expanded from identifying individual exposures to understanding how those exposures interact and compound.

“A risk manager has to look at financial, operational, regulatory and reputational risks – and build a holistic view of the organisation’s risk landscape. With such complexity, today’s risk managers are looking for sophisticated partners who can understand that risk, sell a broad spread of coverage to meet their needs and quickly innovate or develop a product to meet their needs.”

Davies added: “In that environment, the conversation is shifting. It is less about tracking more risks, and more about prioritising what matters, understanding interdependencies and making better informed decisions under uncertainty.
“What we are seeing is a growing demand for clarity and partnership. Risk managers increasingly want underwriting partners who can help interpret complexity, challenge assumptions and bring a clear view on how risk is actually behaving in practice, not just how it appears on paper, and that is where our role as insurers comes into play in responding to that demand.”