AstraZeneca places innovative outcomes based policy that covers interconnected risks

AstraZeneca has placed an “innovative” 5-year business resilience insurance policy that responds to three connected risks by focussing on outcomes rather than traditional peril-based triggers.

The solution, which is described as the world’s first connected risk policy, provides AstraZeneca’s captive with protection backed by the world’s three largest reinsurers for supply chain disruption, reputational damage and product withdrawal from a range of major events.

The policy was announced at a Russel Group working group of more than 30 risks and insurance managers. It was formed in 2018 to focus on connected risk and explore how data and analytics orientated solutions could help both corporate risk managers and (re)insurers design risk solutions more suited to today’s world.

“I was delighted to advise on the progress and success of the AstraZeneca Group insurance team in implementing our exciting new Business Resilience Insurance Policy within the AstraZeneca captive and reinsurance framework,” said Kevin Steed, head of group Insurance at AstraZeneca.

“The level of dialogue between the various risk managers on the Russell Working Group call was phenomenal, clearly outlining the common interest that insurance products need to be relevant, not just now, but also for the future. Our risk landscape is constantly evolving, and we need to adapt and move on. Sharing the learning and experiences should help all of us in our roles, and position corporate insurance as a headliner for innovation,” he added.

David Broughton, chair of the working group and head of insurable risk at Centrica, said there is a real need to move away from peril-based traditional insurance products to considering risk from an outcome-based perspective.

“We are delighted that one of our working group members has made such a bold, forward-looking leap into what we expect will be a new era of outcome-based solutions to tackle connected risk,” he said.

Russel Group, which thinks there will be “major” industry shift to innovative risk transfer structures of this type, said the “tangible connected risk solution” marks a “new era for insurance”.

“The insurance market has been perceived as being resistant to change but here is an example of the market leaders displaying true innovation. One of the biggest wins of this connected risk policy is that it responds to outcomes, so it is a major step in the right direction,” he said.