Risk managers from across the UK were in Manchester last week for the annual Airmic conference and the talk was around climate, the economy, cyber and the supply chain.
The organisation staged a press conference to launch a range of reports on the pressing issues for risk managers, but the sting for insurers was in the tail.
As the event came to a close, the organisation’s CEO, Julia Graham, announced that in the coming 12 months Airmic’s research team will be working on a new report the subject of which will be certainly have risk managers and insurers eagerly awaiting the results.
The topic is simple and stark – Airmic is to examine the relevance of the insurance industry.
Graham said the report will look to analyse the current role of the industry, the future risk landscape, and the future relevance of insurance.
The issue for the insurance sector is that they cannot say that this day was not coming.
XL Group CEO Michel McGavick gave a keynote speech in Dublin 16 years ago to a gathering of European insurance and reinsurance executives. Over the course of 25 minutes he spelt out the challenge that the insurance industry faced for its future. He warned that the rapidly changing risk landscape would create totally new risks and a demand for a new way of working. His message was clear, insurers needed to understand the needs of its clients and ensure they remained relevant to those clients and their future needs.
During her time in office former Lloyd’s CEO Dame Inga Beale would cite the world’s biggest candle manufacturer and its sudden and rapid demise with the advent of gas and electric lighting, as a warning of relevance. She explained its failure was quite simply that it did not understand the company was not manufacturing candles but manufacturing light and when the way light was manufactured changed, they failed to change with it.
Recent years have seen commercial insurance undergo a torrid time, with the legal battles around business interruption during COVID resulting in a public relations and reputation disaster.
Globalization has brought with it new geopolitical risks and in the past three years events have driven a hardening insurance market. Climate risks are increasing but the reinsurance market’s appetite for has diminished, leaving insurers with some tough choices to make on the level of coverage they are willing or able to offer.
Cyber cover continues to vex the market and frustrate risk managers with capacity still hard to come by as insurers change appetites and with it product structures.
On reflection the timing of Airmic’s research does not seem as surprising as it did at the time of the announcement.
We can expect the event to launch the report to be very well attended.
Jon Guy, Editor