Hard market leading to spike in demand for claims help from corporates

France-based international loss-surveying group Erget has reported a rising level of demand for help with claims from corporate risk managers and the middle market, as they grapple with the impact of the hard market and higher retentions.

David Vigier, former group director, business development and partnerships at Sanlam Pan Africa, and group corporate risk manager at Europcar Mobility, joined privately-owned Paris-based Erget in January as director, business development and international. He told Commercial Risk Europe that this development does not surprise him, given the current tough market conditions.

Risk and insurance managers are left with much higher deductibles and/or captive primary layers after a challenging last 1 January renewal season, which saw insurers take a much tougher stance than in the past and pull capacity from more difficult areas. As a consequence, risk managers and captives have chosen to secure loss survey and management services to protect their retentions.

This offers specialist companies such as Erget with opportunities to expand their business in the corporate space, as they can use their claims expertise to help risk and insurance managers make sure their uninsured losses receive the same level of attention as if they were insured, said Mr Vigier.

Erget was founded 30 years ago by the father of current CEO and president Ludovic Redier, and historically has acted on behalf of insurers in core lines such as construction and engineering, and marine. In recent times, however, the group has expanded internationally – particularly in Asia and French-speaking Africa – and expanded its specialty liability offering, increasingly for corporations and captives. The recent hardening will inevitably accelerate this process, said Mr Vigier.

“Roughly a third of our business is now specialty and largely liability, in specialised and technical areas such as aviation and aerospace, chemicals and agrobusiness, and complex bodily injury cases. Historically, our commissions have come from insurers but the hardening insurance market has led to a lot of enquiries from insureds. This is not surprising as the hardening has meant that retentions have skyrocketed for the middle market and big corporates. Insurers are applying more exclusions and taking less risk transfer,” he explained.

“We are having an awful lot of contact with insureds looking to partner with us on loss surveys and the handling of losses that are now retained. This is an interesting trend and one in which I see a lot of potential growth. For us, it is also a way of diversifying our traditional business base,” continued Mr Vigier.

“We do not see this as conflicting with our traditional business stream with insurers, as they are showing a willingness to walk away from portions of risk that are not seen as so valuable to them, too cheap or too volatile. We rather witness a trend whereby insurers are no longer the exclusive purchasers of loss survey services, which help to objectively establish the reality of what causes the loss. All parties in the value chain have a growingly convergent interest to design a robust and inclusive claims strategy that will protect insureds’ retention and insurers’ excess,” he pointed out.

Three clear areas of growth for Erget in this space are product recalls, environmental and pollution and, of course, business interruption (BI). One interesting service offered by the claims management company that is of obvious appeal for risk and insurance managers, particularly in the middle market currently, is the forensic accounting skills offered to help calculate the value of losses more accurately and avoid timely and costly disputes with insurers down the road.

“We are very focused on general liability, professional indemnity and, particularly currently, product recall. We are pushing our environmental risks offering because we have the skilled and experienced engineers who can really help in this area. This is an area that, in my view, has a lot of potential in France in particular, as the government and national environmental agencies have taken a much harder line in recent times,” explained Mr Vigier, referring partly to a range of regulatory changes introduced in 2016, such as the law on Recovery and Protection of Biodiversity of 8 August 2016, which widened corporate liability for environmental and pollution damage, protected ‘whistleblowers’ and gave the government great powers to impose fines.

At the same time, the government itself is subject to legal action itself in the so-called ‘case of the century’ brought against it by a group of NGOs for failing to meet its climate change commitments. Meanwhile, leading French energy company Total remains under fierce legal pressure brought by action groups, to meet its stated climate change promises in relation to greenhouse gas emissions. French risk managers and CEOs are therefore watching this area very closely indeed currently.

Another ‘demand driver’ for Erget and the whole claims sector will also be the rising concern among many in the sector about potentially declining quality of control and maintenance within industrial facilities because of the physical restrictions brought by the pandemic.

As Mr Vigier explained, all these factors make calculation of BI damages or indeed cyber losses very challenging, particularly for those companies that have limited dedicated risk and insurance management capabilities. “We are not talking about the technical aspect here but the pure financial aspect, the establishment of the numbers resulting from the loss. We have a team of dedicated and very seasoned accountants who are able to do just that,” he said.


Commercial Risk is hosting a Claims Management Conference on 27-29 April 2021. We have worked with a number of European risk management associations to bring together a group of experts in a virtual forum to discuss how best to adapt to emerging long-term risk trends and explore the type of claims patterns that these new exposures are generating. Click here to secure your seat at the event.

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