GVNW forum stresses need for digital insurance

Data quality and the smart application of technology are key to managing a changing risk landscape and ensuring regular communication between business partners over risk management, said insurers taking part in a recent forum held by the German association of risk and insurance managers GVNW.

The event featured a number of insurers, which shared their experience of writing international insurance in today’s changeable risk environment and the increasingly important role played by digital technology.

The applications included monitoring political risk on a global scale, managing international insurance programmes, structuring cyber risk management and assessing climate change-related risks.

Bijan Daftari, country manager Germany and Austria, and Reto Collenberg, head of international business EMEA and APAC, at Swiss Re Corporate Solutions, presented the company’s PULSE technology platform, used for writing and managing international business.

Collenberg summed up the value of PULSE as follows: “The portal is a vehicle to structure data and standardise processes. It doesn’t remove all the complexity but it does increase efficiency.”

Daftari and Collenberg reported that, after just under three years in operation, progress has been good, notably in terms of data and process management, plus bringing market participants together on one platform.

Turning to emerging risks, attention was inevitably brought to climate change and its consequences.

Holger Geier, regional head of property, energy and construction claims at Allianz, pointed out that  “losses from flash floods are a lot higher and more costly than those ensuing from traditional flood-prone areas normally close to rivers”.

Available data indicates flash flooding will become more common in western Europe from 2040 to 2070. There were also lessons to be drawn from the summer’s devastation.

Dr Hannes Römer, expert cat risk analyst at Allianz, talked about the importance of quality and up-to-date data for risk modelling, given the changing nature of the risk landscape.

The insurers also stressed that this type of rain-induced flooding can impact anyone in any location. It is therefore important for companies to be aware of that and to maintain adequate business interruption planning, they said. Moreover, industrial buildings, in particular roofs, need to be equipped with emergency drainage systems.

Moving onto cyber, Tobias Caspar, a cyber risk engineer at AIG, said: “According to our claims analysis, cyberattacks increased by over 150% from 2019 to 2020.”

He then explained how AIG breaks down the nature of the incidents resulting in cyber claims and structures its risk management accordingly. Caspar said the aim is to understand why an attack worked, what could and should have been done, and how the loss event could have been mitigated.

“If you wonder why we ask so many questions and go into such detail in certain areas, it’s for that precise reason [managing key risks],” said Caspar.

He also advocated a partnership-based approach to risk management between underwriters and their clients, saying it was crucial due to the constantly changing nature of hacking attacks.

The importance of detailed and up-to-date data was also evident in the presentation by Joanna Hitchcock, underwriting manager for political violence at AIG. Hitchcock said terror-related risks are not only extremely costly but also highly dynamic.

To illustrate this point, she referred to Poland. Although it is one of the world’s most peaceful countries, its peacefulness has also deteriorated the most since 2020, according to the Global Peace Index.

That is why AIG uses a monitoring system called IHS, which provides live updates of what is happening in a country at any given time. The system also monitors aggregation risks related to civil unrest and terrorism.