Airmic says members must up game to improve their transfer options

Airmic has urged its members to up their game and better help insurers develop the solutions needed for increasing intangible assets. Speaking at the association’s annual conference this week, Airmic CEO John Ludlow urged everyone across the risk transfer chain to collaborate and finally makes some progress on new solutions to the changing risk landscape. “We’ve been talking for years about the need for insurance to cover risks to intangible assets, yet, despite our best efforts, we’ve made very little progress. In some areas, like business interruption, there’s a perception that things have actually gone backwards,” he said. Whereas criticism over a lack of innovation from the insurance market has previously tended to focus on carriers, Airmic this week widened the debate and stressed that its members need to do more. “There are problems on both sides and that is why we have got to do this together. You can’t do it separately. The missing word is ‘collaboration’. If we don’t get the customers and the market and brokers collaborating, it isn’t going to happen,” said Mr Ludlow. “We are saying the commercial insurance market needs to step up and engage on this, but we are also saying to our members: you need to step up. We need to develop risk managers and give them business expertise and bridge them to the other functions so they understand what is going on. The insurance solutions will only come when we get risk mangers working with the c-suite and then bring the insurer in,” he explained during a press conference. He said the new insurance models needed to cover intangible risks such as data, intellectual property and reputation will require risk managers to fully understand their risk and be able to articulate them to risk transfer partners. This is something that many organisations cannot do today, he suggested. “If you don’t understand or manage these new assets, such as brand or data, then how on earth can you ask an insurer to cover them? That is the problem. How many companies actively manage and monitor their reputation amongst different stakeholders and across different markets? How many companies measure the risk and know how it converts into sales and profit? I would warrant not many. If you don’t understand or manage your assets then you certainly can’t insure them,” said Mr Ludlow. Despite this frank message to both his members and the insurance industry, Airmic’s CEO believes a better future lies ahead and new solutions are achievable. “I think you absolutely can insure most of this intangible stuff. This is a place that insurers and client companies can get to pretty quickly. I believe some of the new technologies are going to help bring this together. So the time to start thinking about this, and how we are going to bring everybody together to find new solutions, is now,” said Mr Ludlow. Other leading Airmic members also stressed the need for members to work harder to understand their risks before they can reasonably ask insurers to come up with new solutions. “You have to be able to articulate your risk. It is about risk managers being cute enough and well connected in their business to be able to articulate those risks for a carrier to take that on,” said Paul Goulding, outgoing Airmic chair and head of insurance at Heathrow Airport Holdings.

Airmic says members must up game to improve their transfer options

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