A journey into the unknown

Adrian Ladbury: What is AXA Corporate Solutions Deutschland’s main focus currently and what is the company doing to make it more customer-friendly in this highly competitive market?

Jürgen Kurth: We are working on two main fronts. The first is the interface with our customers. We have reallocated a number of people onto the commercial side, which is important as part of our effort to intensify communication with the market and spend quality face time with our clients. We implemented account management a long time ago at AXA but recently we have further broadened our presence in Germany.

The second part is that we have also strengthened our technical know-how with new specialists in different lines of business. For instance, we have recently hired a new property manager – Stefan Sowietzki – with a long standing experience in the large corporate client segment and also taken on board a number of new underwriters to join our force of 240 people in Germany already in Cologne, Hamburg and Munich.

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Our main focus is not to gamble in a simple pricing game to drive growth but to understand our clients’ needs, and provide them with adequate solutions as well as an excellent level of services throughout our global network, be it in risk consulting, claims management, policy handling or other areas. According to the feedback we have received from our clients, we have been doing well so far, and certainly are considered among the leading insurers in Germany.

AL: This sounds sensible but can you give me a concrete example of what you are doing and how it should work?

JK: The insurance market is generally accused of not being innovative. I believe the term “innovation” is abused as providing broad insurance coverages for all types of clients. In my mind, it should be part of the individual insurance concept for one client since in the corporate segment each client has different demands. For example, during the DVS Symposium, we discussed the example on non-damage business interruption (NDBI). I was on a panel at the DVS Symposium on this topic hosted by Ingo Zimmermann, Head of Corporate Risk Management at EADS, and we are willing to enter a dialogue with customers about this. To make this work the client really needs to be prepared to specify in detail what he needs and provide the information required to allow us to properly assess the risk. There are many factors to consider here such as supplier relationships, which can be complex, and of course this varies from industry to industry. We are ready to commit technical expertise and risk consulting resources to this area, in order to develop solutions as we already have agreed them individually with some of our clients.

AL: It is certain that the risk managers will welcome such an effort as the problem of uninsurability is a growing concern in Germany and across Europe. What is the goal of this for the insurer?

JK: The overall goal of this effort is not so much to increase volumes but to respond to client issues, and continue the dialogue even when the topic is a critical one.

AL: What are the main challenges that need to be overcome to make this work?

JK: The main challenge is the willingness of both parties to discuss such topics and accept each other’s position.

AL: What can insurers such as AXA Corporate Solutions do to raise the level of insurable risk which some risk managers believe can be lower than 10% of total risk? Can insurers cover at least parts of the missing 90%?

JK: With the help of our specialists and engineers, AXA always carefully monitors legal, technical and other developments on the worldwide markets. In many cases, insurance products have been created in order to respond to new legislation or emerging risks.

At the same time, with our clients becoming more global, solvency legislation advancing and an increasing number of natural catastrophes, we have to clearly allocate our capital in such a way to act as a financially strong partner for our worldwide clients.

AL: What specifically is the DVS doing about this big question and what do you need from them?

JK: You need to ask the DVS on this topic, but from my perspective I think we need to launch a working group composed of clients, insurers and reinsurers to start a more concrete discussion. Clients need then to specify what risks they would like to transfer, and we will respond with what we may deal with and what is out of scope. Of course, in order to be able to properly assess the risks, information is key which means that we will certainly require detailed information about the client’s processes and, for instance, his interrelations with suppliers. Another critical factor is the specification of the business interruption limits, and we will have to see whether the insurance and reinsurance industry could respond to the demand raised by our clients, and what is going to be the price for such capacities. Overall, this is a very challenging discussion for both sides and it has only just begun.

AL: What was discussed during your session on non damage business interruption – was progress made here?

JK: During the NDBI session, clients, as well as insurers and reinsurers, present on the panel expressed their willingness to enter into discussions on this topic. We will see if and how the dialogue evolves, even if – at the end of the day – the analysis carried out may show that we are not able to respond to all the demands raised by the industry. I think it will be difficult to define a comprehensive product which covers NDBI losses from volcano eruptions, pandemics, viruses and supply chain failures.

In any case, it is certainly the right approach by the DVS to start the discussion rather than continuing to globally blame the insurance industry for not being innovative.