AMRAE sets the tone for 2022: Rebuild trust and real partnerships to cope with volatile risk environment

The 29th Rencontres de l’AMRAE that took place in Deauville, Normandy at the start of February was the first major face-to-face gathering of risk and insurance managers and their partners in the insurance sector on mainland Europe since the last AMRAE meeting back in February 2020. Over the years, the gathering in Deauville has arguably become a corporate-insurance version of the Monte Carlo Rendez-Vous, as French risk managers takes the chance to hold important face-to-face meetings with their key brokers and carriers, discuss what happened at the last renewal and start looking forward to the next. The carriers that normally attend AMRAE were quite possibly relieved that Covid-19 prevented such face-to-face contact during the last couple of years, as French risk managers became increasingly frustrated and angry with the attitude of their supposed partners during renewals in this difficult period. The market was turning before Covid-19 hit, of course. But the arrival of the virus appears to have hardened the stance of insurers and, some suspect, gave them the excuse to make brutal underwriting decisions on prices and limits on offer, which bore little relation to loss experience or exposure. AMRAE’s member survey of 65 insurance buyers published last October found that 95% suffered rate increases in their P&C covers during their latest renewals. Exclusions have escalated and wordings have become more generic, indicating that underwriters are taking less heed of risk management at individual company level. The situation is particularly worrying in segments such as cyber, where buyers are still struggling to find the limits they need when their exposures are growing at breakneck pace. “At a moment when companies try to address the risk, and have understood that cyber insurance is important, the market has had a tendency to evaporate,” said Léopold Larios de Piña, a vice-president at AMRAE and head of group risk management at Mazars, as the results of AMRAE’s member survey were launched in Paris. PARADIGM SHIFT Not surprisingly, AMRAE president Oliver Wild chose to focus on this topic of rebuilding partnerships through the association’s recent event. “Have you noticed the paradigm shift?” he asked during his address. “Risk mapping is no longer a mere tool, it has become the reassurance, before insurance, that all lines of defence are solid and agile… Not a single responsible investor will risk their money without it. In other words, without risk management, there is no trust between the parties,” he continued. “I understand that organisations are changing their skins and I hear you too, you risk managers… (who are) vexed by the absence of our historical allies,” Wild added, obviously referring to the carriers. Robert Leblanc, chairman and CEO of Aon France, told CRE during the event that French buyers faced severe challenges at January renewals and there are few, if any, signs that the situation will get any better in the near future. “Renewals were difficult in January. Maybe even more difficult than last year,” he said. “There was a reduction of capacity and it was not easy to communicate with underwriters.” “At several large insurers, the people we talked to have no power to make underwriting decisions. They needed to refer to higher echelons that are far away from our clients. The chain of information exchange is too long, and at the end of that chain there are people who do not know the companies that we are talking about,” Leblanc added. He complained that underwriters who represent global insurers in France have taken an automated approach to analysing clients’ business, taking no heed of risk management efforts made by companies to make their risks more attractive to the market. “They do not even look at clients’ dossiers and [instead] say they do not meet the requirements of the computer. Many processes are closed too quickly. It all makes the renewal work enormously more complicated,” Leblanc said. CAPTIVES No-one should be surprised then to find AMRAE working hard to push the concept of captives in France, and at the highest level. When faced with hugely challenging risks such as cyber, pandemics, climate change and natural catastrophes, French corporations cannot just sit and hope the insurance market will step up to the plate. The experience of the market during the last three years has surely shown this. It is to be hoped that the French Finance Ministry will deliver the goods and come up with a workable solution that will persuade the many AMRAE members currently looking at captives to take the leap and take more control of their risks. INTO THE LION’S DEN Joachim Mueller, CEO of Allianz Global Corporate & Specialty (AGCS), was invited to give the keynote speech from the insurance sector at AMRAE’s conference, and was brave enough to take the podium – entering the lion’s den perhaps. Mueller did not mince his words. He responded that AGCS, while having significantly rewritten its book during the last few renewals along with most rivals, is also seriously investing in the data, analytics and people to help move the market forwards, away from the old cyclical ups and downs that help no-one and onto a more consistent and technical future. As he and Oliver Wild stressed during the event, this really is all about genuine collaboration and partnership, not fine-sounding words that are forgotten when the market takes a shift following the next big event. It really will not be good for anyone if carriers continue to hunker down and play an overly defensive game, then see their core customers seek out alternative options for the wrong reasons. This does need to be a team game, as France and the rest of Europe prepares to deal with the consequences of the Russian invasion of Ukraine, the ongoing global supply chain crisis and the next major catastrophe that will inevitably follow.

AMRAE sets the tone for 2022: Rebuild trust and real partnerships to cope with volatile risk environment

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