DVS board member Henne criticises brokers and urges them to up their game

He also urged colleagues to stop criticising insurers over cyber cover and give them time to develop suitable solutions. "I am surprised that brokers are reluctant to change their traditional business model," he told Commercial Risk Europe. "Corporate companies with badly functioning business divisions immediately think about implementing changes to improve the situation," he said on the ongoing soft market conditions and falling commissions for intermediaries. "I cannot see such efforts on the part of brokers." Brokers know their clients' risks very well and should use this information to much better effect than they are managing today, argued Mr Henne. "Instead, consulting and law firms are filling the gap, even though they are much further away from the clients' issues than brokers." Mr Henne suggests that brokers should inform their clients much more quickly about important global changes. "We often have the situation that brokers are the last people to give relevant information on a specific country, rather than the first ones as they should be," he said.hideHe called for improvements, especially when it comes to political or legal developments and new non-admitted insurance rules. "Sometimes it is hard for a company to find out what is allowed in a particular country and what not, or what has been changed recently," he said. "Sometimes there is a topic in the press and risk managers in a company are asking themselves: What does that mean in practise for our company? Do we have to change anything? Yet brokers provide no help for guidance in these situations. Generally speaking, brokers could use their networks that they are well-paid for, in a much more effective way." Turning his attention to new cyber policies, Mr Henne said that companies should give the insurance industry a chance to work on new products and not jump to criticise at every occasion. "Generally speaking, it is a good idea to have cyber insurance," Mr Henne said. "But it is also a topic that is difficult to handle in many companies. From today's perspective it is hard to assess whether an insurance policy is sensible and sufficient or not and whether it covers the real risks." In his experience new products like cyber insurance need time to become established. Mr Henne thinks it is important that companies show interest in buying cyber cover so that the market can develop. "In a few years' time it will be possible to judge how good the cover is and insurance companies then can know in full because they have gained experience and claims." The DVS board member also believes that cyber risk management is not always top of companies' agendas. "I have heard from colleagues following discussions with insurers and the internal IT department that it can still take two years until the cyber topic reaches the management board,' he said. Mr Henne believes this is because many risk managers do not have enough time to deal with the risk. He also noted that risk management and IT departments need to collaborate to manage cyber risk and place appropriate insurance cover. "The discussions in many companies are the same," he said. "The IT department says we do not have a problem and therefore do not need cyber insurance. But this may be the wrong approach. We do not buy product liability because we think our products are substandard, we buy it to cover unforeseeable risks. It is very important that IT departments and risk managers find points of contact and establish mutual trust." Epcos, which is an affiliate of the Japanese electronics giant TDC, supplies electronic components around the world. In recent years Mr Henne has observed that Epcos' clients are trying to obtain more risk information about the company than ever before. "Some want more detail on natural perils in relation to production facilities," he said. "But it is not very clear as to whether this information is only for their own risk management or whether it will be passed on to insurers as well." Mr Henne criticised the lack of transparency over risk questionnaires sent to Epcos by customers. "When I look at the questionnaires used by some clients I often wonder how this information can really help," he said. "For us it is not clear how clients use this information and what consequences it has for their business relationship. I see a serious weakness in only asking about risk information by merely ticking the appropriate box." He has heard of more than one case where a business relationship was interrupted and a supplier blocked purely because of the information in a questionnaire. "This was despite the fact that a risk was not that critical as stated in the questionnaire," Mr Henne said.

DVS board member Henne criticises brokers and urges them to up their game

Want to read this article?

Read Next

AstraZeneca places innovative outcomes based policy that covers interconnected risks

40% of ESG investment funds in Europe accused of greenwashing

Talanx brings forward targets in new sustainability strategy

German insurers brace for rising fraud cases

FM Global reveals record $1.4bn renewal credits

AstraZeneca places innovative outcomes based policy that covers interconnected risks

40% of ESG investment funds in Europe accused of greenwashing

Talanx brings forward targets in new sustainability strategy

German insurers brace for rising fraud cases

FM Global reveals record $1.4bn renewal credits

Want to read this article?

Read Next

AstraZeneca places innovative outcomes based policy that covers interconnected risks

40% of ESG investment funds in Europe accused of greenwashing

Talanx brings forward targets in new sustainability strategy

German insurers brace for rising fraud cases

FM Global reveals record $1.4bn renewal credits

Related Articles