Profitable growth possible in tough market as Generali Global Corporate & Commercial

Hard work, careful selection of quality clients and resolutely charging the right price for risk are the three core principles insurers must adhere to in today’s highly competitive insurance market, according to Paolo Ribotta, head of Generali Global Corporate & Commercial (GC&C), the corporate insurance arm of the Italian insurance giant. Overall costs also have to be tightly managed and reduced where possible in such a tough market. Generali’s recently installed top management team, under Philippe Donnet, has set the group some challenging cost savings targets that the firm says are on track. Generali is certainly not alone in its efforts to reduce frictional costs in this still highly competitive market, in which decent margins are tough to achieve. Insurers also have to act quickly and decisively if sectors simply do not offer an adequate margin. Generali, for example, recently pulled out of the unprofitable London marine hull market because it simply did not offer an adequate return. But good growth opportunities are still available in this market if the insurer has the right technical skills and knowledge, is able to gather and analyse the correct data to accurately price risk, and has good relationships with quality brokers. One area in which GC&C is expanding is the middle and upper middle commercial market, which is typically dominated by the national and independent brokers. Recent investments in the UK and German retail commercial markets have paid quick dividends, said Mr Ribotta. “Retail business has risen from 16% to 30% of the share of the UK book over the last two years, as we have expanded into the regions. The German operation has far exceeded expectations and we are really excited by this,” he told Commercial Risk Europe in Monte Carlo, as Europe’s corporate risk and insurance management community gathered for the Ferma Forum. Truly understanding the customer, their growth plans and priorities is critical for any insurer as it works hard to make sure its own book of business is well balanced, adequately diversified and risks properly managed and priced, said Mr Ribotta. “You have to be fully confident that you know where the customer is going, why and how. This is where the broker and agent plays a critical role, especially in the middle market. Typically, the customer does not have a fully-fledged dedicated risk management department and works closely with the broker in a close and long-term relationship. If we work closely with the broker and the client too, then you can find that a lot of value can be added in areas that the client never thought about in the past. “This is especially true if you bring specialist third parties into the arrangement that can add technology, expert advice and services and capital in areas that the typical middle market company does not have the capacity to do in-house. An ecosystem can be created for the client in which all parties support each other,” he explained. This process can also include vital preparatory work for claims to ensure that when they inevitably occur, processes and communication lines are already well established, added Mr Ribotta. The role of the national, independent broker is more important than ever in the middle to upper middle market because they tend to have long and deep relationships with the customers, which need to be valued and nurtured, argued Mr Ribotta. “We have to do everything we can to support the independent broker. We have close relationships with the leading ten to 15 independent brokers in all European countries in which we operate, and these are real deal makers not deal breakers. We play to their strengths, whether it be P&C, life or benefits assistance. We offer everything that Generali can do and in each country we adapt the approach. The clients in this segment really do differentiate between insurers – we are not regarded as mere capacity providers,” he added.

Profitable growth possible in tough market as Generali Global Corporate & Commercial

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