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Defining moment for the industry

Charles Taylor Adjusting discusses some of the big issues facing risk and insurance managers as they gather in Copenhagen

What do you see as the big risks on the radar?

Carlo Spadoni (CS), head of Charles Taylor Adjusting PCTSR for the European region: The long-term consequences of the international conflict in Ukraine on the global supply chain are front of mind at the moment, as the war could have very devastating consequences on businesses, as well as the communities they serve.

We are facing a new scenario that has never been experienced before. Europe – which is currently facing this rising conflict – has a global supply chain that is incredibly interconnected. There are contingency business interruption risks and threats to both large corporations and smaller companies, which are related to this macro geopolitical scenario. These risks are increasingly difficult to assess, and some of them may not be covered by today’s insurance policies.

This scenario causes an altogether new threat to large corporations and new challenges to the insurance industry. We therefore need to think about how we can better define what is covered and what is not, and determine which tools we should use in order to deliver the right solution to policyholders.

How could this impact businesses and the insurance companies that support them?

Daphne Naudy (DN), senior loss adjuster for property, casualty, technical and special risks at Charles Taylor Adjusting: There are varying degrees of severity in terms of potential loss. At one extreme, a loss may involve the total disruption of the supply chain and a complete outage; or a loss could relate to a simple partial outage for some key clients.

In both cases, some companies, or their key suppliers, may therefore be forced to stop or reduce their own production. This, combined with an increase in the cost of materials, services or energy, is going to be a common issue for most manufacturers worldwide and in Europe especially.

Are there any measures companies can take to avoid business interruption?

CS: This strongly depends on what has already been put in place in the past in terms of diversification of supply sources. Insuring or reinsuring is, of course, a trend that had already gained momentum in the last two, or three years.

There is also the possibility to transfer the risk beyond the pure financial solution. An alternative solution could be to purchase futures on the supply of raw materials or services. However, as far as our industry is involved, the risk must be managed through insurance policies designed for business. In the pandemic we saw that only some contracts included provisions for this kind of risk, leaving many businesses without cover. The same applies to property or first-party coverages, which may or may not include a provision for contingency business interruption and have appropriate limitations.

Our ability to assess how we consider these occurrences to be related to an excluded peril, notably war, is therefore a recurring topic.

How are Charles Taylor’s teams preparing to support their clients?

DN: First of all, we have our own people working as a single team in all of the world’s main regions. In Europe, we have Charles Taylor teams, not affiliates, present in our offices on the ground. In addition to our people in the UK, we are present in many countries from Scandinavia to Turkey, from France to Poland and from Italy to Germany and beyond.

This allows us to assess losses and provide local knowledge to a global challenge. Our adjusting teams – spanning P&C, special and technical risks, aviation, marine, and natural resources – are joining up to support our clients. In addition, our insurtech team delivers connected technology solutions for customers in the insurance value chain.

You have attended Ferma Forums for many years, what makes this 2022 edition important?

CS: We are facing two key challenges: the lingering pandemic and this macro/socio/geopolitical challenge. It’s a defining moment for our industry and the sheer fact of having a chance to meet in-person after a couple of years is already an achievement. Yet, it is also a moment to redefine some of the roles of our industry, and Ferma is a valuable opportunity to address these important topics together.


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