AMRAE president criticises insurers for ‘arbitrarily’ reducing capacity as shortfalls emerge

The president of French risk management association AMRAE, Brigitte Bouquot, has criticised insurers for “arbitrarily” reducing capacity for clients at recent renewals and warned that buyers now face situations where certain risks cannot be covered. Ms Bouquot is concerned by moves from insurers to reduce capacity without taking into account factors like the quality of risk management, or factoring in clients with which they have forged long-term partnerships. This is adding to a capacity shortfall in some areas and is causing problems for insureds at renewal. “Today, risk managers face the possibility of having to face their boards and tell them that there are risk scenarios for which insurance coverages are no longer available in the market,” said Ms Bouquot. “That is a new situation.” According to AMRAE’s president, adopting new risk transfer strategies, including more self-insurance and a broader role for captives, is one solution to this problem. This allows insureds to directly tap the reinsurance market and increase demand for their risks. Ms Bouquot said the rise of captives is both an opportunistic reaction to market conditions and a potential long-term trend that will transform risk transfer strategies. “It is clear that the situation was so tense in the latest renewals that many risk managers have realised that, if they had a captive, they would be in a stronger negotiation position… But from the moment that companies understand the captive tools, they also see that risk management improves as they better measure their risks,” she said. Ms Bouquot made the comments during a press conference in Paris, where it was revealed that a workshop on dealing with business interruption losses without physical damage is the most sought after by members attending the association’s annual conference early next month. This is not a big surprise, given that French companies face potential indirect business interruption losses from cyberattacks, natural catastrophes, street protests and strikes. The session on non-damage business interruption (NDBI) at AMRAE’s conference will unveil the results of a study the association has commissioned as the risk rises up the agenda. The second-most sought-after workshop will tackle the evolution of risks and how the insurance market is evolving to provide solutions, a topic related to challenges brought about by NDBI. The main theme of the conference is the expanded role risk managers are increasingly being asked to play in society and even politics. Issues such as how risk management must get involved in environmental, social and ethical issues, which are becoming core to company strategies, will be discussed. So too will political, social and technology movements that are shaping the business environment for French firms. “In a world in transformation, in turmoil, where the risks scenario looks much deeper, we can say that the responsible company must understand the risks of the world and become responsible to engage with society,” said Ms Bouquot. “Risk management has thus become the base of the responsible company,” she added. The 28th edition of the Rencontres de l’AMRAE will take place on 5-7 February at the seaside resort of Deauville, in northern France. The association expects some 3,000 people to attend the conference.

AMRAE president criticises insurers for ‘arbitrarily’ reducing capacity as shortfalls emerge

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