Innovation coming to fore through Covid-19 crisis, says Louppe

Being prepared and flexible has been key in finding innovative solutions to working through the Covid-19 crisis, according to Florence Louppe of HDI Global.

Coping with the Covid-19 pandemic has brought out the best in people as they find innovative solutions and workarounds to keep business moving through worldwide lockdowns, said Ms Louppe, the insurer’s country manager in France.

“Right now, I believe that all our energies must be concentrated on supporting our teams and our clients. This is the challenge we must rise to. The time will come when our duty will be to look back, to assess and learn so that we can improve in the future,” she said.

For now, “everywhere, people are giving their very best in this situation”, she said. “It makes it even more crucial for us as managers to ease the path for them. We have to recognise that this crisis is probably the most powerful accelerator of change we have ever had. Agility has become crucial, along with the need to make quick decisions or decide priorities. Paradoxically, this crisis also reinforces interpersonal links and professional communities. We should not forget about it afterwards,” she added.

Ms Louppe said the pandemic has also highlighted the need for solid risk management and that preparation and rehearsal are key.

“At HDI France, we had tested our business continuity plan in December, so we could switch to fully mobile working without particular concerns. On Thursday 12 March, instructions were given to all staff that it would be their last day in the office, which enabled everyone to leave the office with all that they needed to ensure business continuity. I am very grateful to my crisis management team that enabled this smooth transition,” said Ms Louppe.

She stressed that risk managers have already played a key role in helping companies transition to working from home. “At such times, the risk management role becomes more critical and central within the company. They are among the rare resources with a holistic view of their group and who have a clear vision of interdependencies. C-suites must more than ever listen to them and facilitate their actions,” she added.

One of the first questions that many risk managers have been considering is whether insurance policies continue uninterrupted as staff move locations. For example, there have been calls from construction clients about the changing risks as sites are closed down, explained Ms Louppe.

“At HDI Paris, we have set up a hotline with all our risk engineers available to our clients. They collaborate with risk managers and their colleagues to find the best solutions to stopping a production line, for example. This collaboration will also be key when the activity starts again, as we know how sensitive this restart period can be in terms of risks,” she said.

Another major area of concern is cyber risk. With more staff working from home, the risk of an attack has increased. Sadly, hackers have even stooped as low as hacking into a major Paris hospital during the crisis, noted Ms Louppe.

Support from insurers is vital throughout this period, Ms Louppe stressed. She said insurers need to “be present and ensure business continuity”. “That is our first duty: warranting business continuity by renewing their insurance contracts, completing risk reviews, providing risk engineering services, handling and paying their claims. New business activity also goes on and we continue to service our brokers with an unchanged reactivity in this respect,” she said.

Ms Louppe also warned that other risks, such as climate change, are not going away and she said risk managers cannot drop their guard. “Sadly, we had people dying in extreme weather events in France last year and there have been some major catastrophes worldwide,” she said.

For risk managers, one of the most pressing issues – aside from Covid-19 – has been business interruption and supply chain threats.

“Supply chain risks have also proved a major concern throughout the Covid-19 pandemic and may result in corporates reconsidering their supply chain strategies in the future,” said Ms Louppe.

Turning back to the question of which risks are covered in terms of Covid-19, Ms Louppe admitted “there is no black-and-white answer”. “Regarding risk coverage, we will consider every case individually, based on the wording and the effective loss suffered by the client,” she said.

“As far as our market is concerned, the coverage structure is pretty clear and we very rarely provide coverage for virus-linked losses or losses linked to lost business. In property, as an example, claims are always initially triggered by a covered physical damage,” she added.

As elsewhere, the French market has had numerous non-damage business interruption discussions in the past. However, Ms Louppe said: “We very often failed when it went to defining precisely the scenarios to be covered. This discussion will come up again with a new background framework. In France, pandemic coverage discussions are very hot right now and the French federation of insurance has engaged in setting up the appropriate response for future pandemic risks. But as both hazard and mutuality – two fundamental elements in any insurance coverage – have disappeared in such a scenario, the answer will have to include other parties.”

Ms Louppe would not speculate on what the pandemic might mean for insurance pricing, saying the current emergency “deserves better than speculation”. But she added: “The priority right now is to ensure business continuity, but also to preserve our sustainability. Sustainability has always been our priority. A functional insurance market depends on risk-based premium to maintain its sustainability. For the last couple of years, the corporate insurance market has not been making money. So now, we must and will continue making reasonable decisions regarding risk pricing to ensure this sustainability going forward.”