BIBA 2022: Resilience vital as risk landscape continues to change

Brokers have been told they need to work with clients to move away from seeing insurers as simply the providers of cover and capacity.

The warning came from Peter Davis, (pic) head of customer and distribution, commercial insurance at Zurich, as brokers arrived in Manchester for the opening day of the BIBA annual conference.

Speaking to Emerging Risks, Davis said brokers and their clients were faced with a radically changing risk landscape, coupled with a change in the way people work and the need for a greater focus on resilience and risks mitigation.

“Brokers and their clients are facing a complex risk landscape which is constantly changing,” he explained. “As an insurer we have huge amounts of data from both the business and our clients which allows to have a good view on what is going on.”

He warned that inflation was a huge issue for the industry and its clients and created the need for a thorough review of insured values.

“Companies and risk managers need to review the values they have within their polices. We are seeing rising property values and inflation is also having an impact in the claims and with it claims costs.

“The cost of rebuilding property is rising as are the values for personal injury claims and these need to be understood.”

Davis said climate change would continue to play a greater role in the management of risks with more severe and more frequent extreme weather events likely to affect an ever wider number of companies and with it their insurers.

“We cannot ignore cyber,” added Davis. “The move to grater digitalisation which were accelerated by COVID have seen that shift towards digitalisation and with it increasing interconnectedness.

“We all recognise that at present the cyber market remains a really tough place. Brokers have seen an increased demand but clients have to appreciate that the ability to access capacity goes hand in hand with better understanding of the risks you face.”

Davis said supply chain risk is impacting companies of all shape and sizes from the SME to international organisations.

“These developing risks are faced by all business but as an industry we need to understand while the risks are the same the individual risk profiles of every business are unique.”

He added that firms needed to understand there was now a real requirement for greater resilience, rather than simply relying on the insurance contract.

“Resilience underlines it all,” David explained. “We launched Zurich Resilience Solutions to not only provide traditional risk management and risk engineering, but also to enable clients to access services which can help our customers to improve their resilience.”

He added technology will make a difference to the market. The key for the industry’s future will be the ability to deliver products and services quicker and more efficiently.

“Ultimately it has to be about delivering the right things quickly for the customers.”

Davis said the market needed to move away from the perception that the insurer’s role was simply to provide the insurance policy. Rather they had a significant role in working with brokers and clients to improve resilience and with it reduce claims.

“It is about understanding risk,” said Davis. “The better you understand your risks the better you can take steps to prevent them.

“The best management of risk is to prevent it happening in the first place.”

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