GVNW sets focus on digital platform, ESG roadmap and captives

CEO of the GVNW and senior vice-president at BASF, Patrick Fiedler, told Commercial Risk that the association will focus on the development of its new digital platform for the industrial insurance market, its “ambitious” ESG roadmap in partnership with the Funk Foundation and, moving forwards, the promotion of Germany as a more attractive captive domicile over the next 12 months.

German risk and insurance managers would love to see the creation of an independent risk data exchange for the industrial insurance market to reduce complexity, duplication and cost, and raise transparency and efficiency. GVNW is working on such a project right now.

The rise of ESG in the industrial insurance market has been a challenge for many GVNW members, who have faced mounting requests for information and data but little clarity about how it is being used and whether their employer’s positive efforts are being recognised in any way.

The association’s partnership with the Funk Foundation to carry out an analysis of this evolving area and deliver greater clarity and consistency will add significant value in this area. The ESG study is financed by the Funk Foundation and being carried out by IPRI’

And while there are few signs of Germany following the French and Italian lead in making captives more attractive to locate on domestic soil, GVNW will continue to bang the drum when and where necessary, and educate those that matter, about the true risk management value of captives.

The association is currently working with the Technical University of Cologne on the captive issue through its comparative study of regulatory treatment across Europe.

“We aim to transition our data exchange initiative from theory to implementation and will focus a significant portion of our efforts in this direction. We will also focus on our ambitious ESG roadmap. The remainder of our efforts will be dedicated to preparatory activities concerning captive domiciles in Germany, as well as our traditional areas of member support and recruitment,” said Fiedler.

Cyber was a serious problem for GVNW members during the recent market hardening as capacity shrank and prices rocketed. As with D&O, however, the market has since turned back in the buyers’ favour.

But the GVNW shares the concern of many other risk and insurance associations and market leaders around Europe about the wider systemic cyber threat, notably on critical infrastructure. It agrees with peers that for these types of risks, government backing and shared solutions are possibly the answer, though the political appetite in Berlin for such solutions does not appear to be there currently.

”Threats such as attacks on critical infrastructure and cyber terrorism are emerging possibilities that could be addressed through, for example, an expansion of the Extremus business model. Yet it is not possible for us to bring this on the political agenda in Berlin,” he added.

Sanctions remain another hot political potato for German companies and insurers particularly, given Germany’s formerly relatively close trading relationship with Russia. A market-wide approach to this area would again be ideal, offering more certainty, consistency and transparency for all.

“The management of sanctions is a product of political decisions. This is where traditional business associations play a crucial role, as it pertains less to insurance matters. Our focus lies in the wording used within insurance contracts, which varies from company to company. Establishing a market standard would undoubtedly be beneficial, but each insurer must prioritise the interests of its stakeholders. We will refrain from taking a stance on this matter,” said Fiedler.