Insurance capacity available, but not necessarily right for risks–Netherlands

The Dutch risk managers taking part in our European Risk Frontiers survey also said that risks remain country specific and insurance programmes need to reflect these differences if they are to properly cater for the needs of insureds. The risk managers went on to warn insurers that they need to focus on innovation if they are to avoid losing out to the competition, including other forms of risk transfer. Jacqueline Plessius, Global Insurance Manager at TNT, said insurance needs are often culturally specific. Taking employee benefits as an example she said risk managers must consider not only local legislation, but also the cultural environment of each location.hide“For example, in the Netherlands there is a high level of government benefits that are totally different to those in other countries. You might consider pooling employee benefits insurances, so you can lower your costs, but the local policies themselves will greatly differ per country,” she explained. Adri van der Waart, Insurance Manager at ARCADIS, agreed. He added that expatriate workers may want a different level of service to those based locally because they have different cultural expectations. Another challenge when it comes to employee benefits is that HR departments will generally be involved. Often, HR will not be aware of the insurance possibilities and will not think to involve the risk manager, said Mr van der Waart. The risk managers agreed that their job is to facilitate the business and make departments aware of options so they can do their job more efficiently. As Mr van der Waart said, while risk managers may work on a global overview, they will often get calls from local offices wanting very detailed answers on specific issues. He also stressed the importance of broadening out conversations. “For example, when people want to talk specifically about data protection, we will want to talk about cyber risks more generally at the same time.” Ronald de Vos, Insurance Manager and Legal Counsel at Nutreco, said that boards expect risk managers to have an increasingly broad awareness of a number of issues. “We have spent more time considering political risks because the company is going into new markets. It is not only the Far East and South America but also Africa.” Peter den Dekker, Insurance and Risk Manager at VimpelCom, said: “It is clear that we looked at risk differently 10 years ago than we do now. Cyber risk and data protection has risen up the agenda.” “It is a very serious issue for us as a telecoms company because we hold so much customer data. We also need to be advising some of our clients about how they should be protecting their data in turn,” he added. One challenge is to make sure all parts of the business are fully communicating with each other. It is also a challenge to ensure the insurance provision is adequate and that the insurance industry fully appreciates the risks. Annemarie Schouw, Risk & Insurance Manager at Tata Steel, agreed that awareness of internal issues and the broader picture is critical. Mr Den Dekker is concerned that insurers are not fully abreast of developments. “If you look at cyber and knowledge in the insurance industry, it is very limited,” he warned. “The only knowledge they have has been provided by third party advisers, so they hire consultants to advise clients. But the clients know more about the issues than the consultants or the insurers.” He acknowledged that it is not always easy for insurers. “It can be hard to quantify the risk—even within our own companies,” he admitted. “If you lose data, for example, you have a reputational issue. It is not just about that but the business interruption costs can be gigantic and then there are the associated fines and liability claims. The cost has many levels so you need to bring many different factors together when considering the exposure,” he continued. Finding the right insurance is not always easy, said Mr Den Dekker. Sometimes the right questions are not being asked by either risk managers or the insurance industry. “Insurers are going all over the place because they have no idea and the majority of advisers in this area are not insurance specialists,” he said. “Insurers need to invest a little more in getting knowledge. This is a big opportunity for the insurance market. It is becoming a virtual world.” Mr De Vos believes communication and sharing information is crucial. “It is difficult enough to assess risk and so we have an important role in communicating the risks.” Mr Den Dekker agreed and noted: “If I asked 10 underwriters to put a number on a claim I would get 10 different answers and maybe one would be right—that is quite a gamble.” The danger is that insurers are not assessing the risks in full. “I don’t need an insurer to send me an engineer to count the sprinkler systems—I know I need sprinklers but I could do with their support in my role. I think this is where insurers are lagging behind. They can’t sit behind their desks, they need to meet their clients and understand the new risks.” He fears there is a general lack of understanding among risk transfer partners, particularly when companies start to target new markets. Mr De Vos has a more positive outlook and believes that some insurers and brokers have recognised the need for change. Ms Schouw said insurers are beginning to ask to see risks for themselves. The survey participants agreed that the key to success is risk managers, insurers and brokers all communicating and working together. They agreed there is enough capacity available in the insurance markets but the trick will be ensuring it is the right capacity to properly cover the emerging risks. As Mr Den Dekker concluded: “There is a difference between providing capacity and providing a solution.”

Insurance capacity available, but not necessarily right for risks–Netherlands

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