Airmic delivers series of reports to help risk management make most of spotlight

As Airmic’s 2024 conference draws to a close, it seems a good time to take stock of where the risk and insurance management stands as it battles through a seemingly never-ending spate of shocks, and take a brief look at some of the reports and guides produced by the association over the last few days to help members deliver.

This year’s conference attracted near record numbers to Edinburgh, with 1,750 risk managers, brokers, insurers and service providers registering for the event. Around 1,400 attended on the first day alone, a record number for the Monday.

Airmic chair Angela Lannetta told delegates during her opening speech that the strong attendance figures demonstrate the “continuing development of the risk management profession” and “incredibly difficult and complex environment that each and every one of us is working in”.

“Times are challenging, but what a great time to be a risk professional,” said Lannetta, who is group head of risk and insurance at British American Tobacco.

While a recent survey by Origami Risk suggests there may have been a slight fall in the priority placed on risk management for the first time since the pandemic, this is not something that Airmic has seen.

“I do not see risk management going down the board agenda. I see it as strong and in a good place,” the association’s CEO Julia Graham told Commercial Risk just ahead of the conference.

“Well-run organisations are usually well risk-managed businesses, and those organisations do not take their eyes off these subjects and their focus remains elevated,” she added.

In fact, Airmic feels that the focus on risk management is likely to have increased further this year as the polycrisis marches on.

“Our research in the past has indicated that boards tend to focus on what is immediately in front of them, and struggle to address risk in the long term. So Covid has gone down their risk radar but there is an awareness it could, and almost certainly will, happen again. But because of the continued examples of, and communication about, high-impact, low-probability risks, such as the geopolitical situation, in some organisations the focus on risk management may well have increased over the past year,” said Graham.

And as everyone rushes around the Airmic conference to make the most of the three days, the association held a press conference on Tuesday to discuss all the publications released at the event. These publications aim to help risk management stay near the topic of the corporate agenda and enable risk managers to step up to the plate.

One of these – Political risk in 2024: The year of elections – focuses on what Airmic describes as “generational high” geopolitical tensions. It lists some key recommendations for risk managers to help manage this mounting threat.

So what does Airmic suggest risk professionals do to manage this risk? Some key tips follow:

• Elections have one advantage as a trigger for political risk or civil unrest: their dates tend to be marked in the diary weeks or months ahead of the events themselves. This gives organisations the opportunity to plan ahead, prepare and brace for impact.
• Risk professionals are increasingly turning to social media and a range of open source intelligence (OSINT) tools and risk map services to provide valuable insights into political risks.
• Horizon scanning and scenario analysis are great tools to manage the surprise factor and avoid being the organisation that did not see the obvious emerge, despite all the signs ahead of elections.
• Risk professionals can approach scenarios ‘top down’ or ‘bottom up’:
• Top-down – which means picking the big-ticket risks and working through the impact on their people, operations and finances.
• Bottom-up – which means picking a particular country or region and adjoining territories where companies have exposure, and working through bespoke scenarios.

The report says that medium-term resources – such as government policies, scheduled elections and evidence of populism, or short-term notice of protests – are useful sources for business continuity planning, scenarios analysis and insurance buying. But it stresses that these resources are only of real use when risk professionals can establish relevance to their organisation. “Without doing this, they are just an observer following the news cycle,” says Airmic.

The association also produced a practical guide to horizon scanning with Barnett Waddingham during its conference. This aims to help readers develop skills in this area to tackle a range of risks.

It explains that horizon scanning is research that looks forward to possible events, with an emphasis on the medium to long term. It explains that the term ‘horizon scanning’ has been adopted as a label for forward-looking activity.

“Looking forward to understand the challenges and opportunities that may arise in any organisation’s future is difficult. Still, it is a feature of good planning and increasingly an expectation of stakeholders and regulators under good governance rules,” says Airmic in the report.

There is no doubt that horizon scanning would help Airmic members better get to grips with mounting artificial intelligence (AI) risk. But Airmic has also produced a guide for directors to help them and their business tackle the threat. It provides a list of 12 questions that boards should be asking about AI to deliver on their duties. These questions also provide risk managers with an interesting set of topics with which to approach top management.

These questions include:

• Assuming I have no particular background or experience in computing, what level of expertise with respect to artificial intelligence will be expected of me as a member of the board?
• Does the company audit and evaluate the extent to which AI is used in its supply chain?
• What are the cybersecurity implications of AI?
• With regard to the various insurances that the company buys (including cyber insurance and covers placed in a captive if a captive exists), do I as a board member understand the potential coverage implications of the extent to which the company deploys AI?

And then there were two more publications released from Airmic’s EXPLAINED Guide series. One is on captive insurance and the other on risk and managing risk. Both take readers through the fundamentals in each subject area.

The final report produced by Airmic at its conference looked at claims, following a member survey. It reveals that Airmic members are satisfied on the whole with their claims service experience but want more information on service when selecting their carriers.

The association’s latest Pulse survey found that almost three-quarters (72%) of members polled said claims experience met their expectations, with 16% saying they didn’t meet expectations. Just under 20% would call on lawyers to support their claims in future, fewer than in last year’s report.

This year’s survey found that claims service levels are a “key criteria” for Airmic members in choosing their insurer. Sixty-three percent of buyers said service level scores are important when making this decision, but only 31% said an insurer’s claims service scores had been presented to them or clearly communicated when placing their risk.

“Claims service level scores are important for more than half of our respondents – insurers need to present and communicate them more clearly to buyers,” Airmic says in the report, which is supported by Liberty Specialty Markets.

Such research should help focus the minds of insurers. It should also help UK risk and insurance managers as they continue to deliver the best risk management solutions to help their organisations through what is undoubtedly a tricky period for many, and take their rightful place as trusted advisors.

All of these publications can be downloaded here.