Insurers and risk managers call for early engagement on GPs

Early engagement is the key to running a successful global insurance programme, according to both risk managers and insurers. The sentiment was shared by a panel of insurance buyers, underwriters and brokers at the Global Programmes conference held by Commercial Risk Asia on 28 November in Singapore, supported by Parima. They were participating in a panel discussion on how to get the best deal from the insurance market. The importance of early engagement was emphasised by all the speakers, as were the limitations of the traditional renewals process. According to Rahul Kumar, risk manager, Apac, for real estate broker Cushman & Wakefield, the renewals process was like a “black box” when the company set up its first global insurance programme. “There was silence for months and then five weeks before the renewal date, the underwriter came back with all these exclusions. It made everyone look bad,” said Kumar. “Early engagement allows us to find that data and go back to the board with a better programme. If all three parties (buyer, broker and carrier) engage earlier, we can find out the factors that will affect the insurance coverage,” he added. For Alasdair Walker, regional head of distribution, Apac, for Sompo International, early engagement is the sign of “true partnership”. However, that engagement should go both ways, he said. “We need more transparency from risk managers. There is a tendency to throw the kitchen sink at the renewals process and that can be confusing,” Walker told delegates. Underwriters are similarly keen to get on top of the data and documentation involved in a global programme. As Rinah Roque, regional service delivery manager producing office, SE Australia for HDI Global, said: “We want to sit down ahead of time and find out what documents are needed, what are the local requirements. My job is to get all of those things done on time.” According to Jeremy Evans, risk management leader, Singapore at Marsh Asia, the pre-renewal strategy discussion should ideally take place four to six months before inception and should address the client’s key concerns, how the business is changing and identify the priorities for the risk manager. “The risk manager should be crystal clear in their expectations by inception time,” said Evans. “If you don’t know what the outcome will be and cannot tell your shareholders, then you need to have that discussion again.” Andrew Chan, senior manager, risk and opportunity, CLP Power Hong Kong, also spoke of the importance of early engagement as well as the need to quantify the total cost of risk. “We engaged everyone really early, including the risk engineers, so that we could set a budget,” said Chan. “You need to quantify risk so that when you’re negotiating you know how much coverage you need. CFOs don’t like surprises.” The industry also needs to overcome some important data challenges, though, before early engagement can be as useful as it should be. Part of this is down to the crudeness of the data collection process. Kumar spoke of the previous use of an annual risk assessment questionnaire that would be distributed internally and elicited a 40% response rate for 80 sites. Consequently, the company decided to revamp its approach and focus on more real-time information. “We needed to prioritise and not have angry site managers asked multiple times to fill in the same 13-page questionnaire,” said Kumar. “It took some training but it got rid of a lot of the noise and allowed us to focus on the sites with the most expensive exposures. You get the desired outcome and you give confidence to the underwriters that you know your risks.” Sharing that information with underwriters also prevents duplication and rekeying, said Kumar. “We made the data available to underwriters to review. It is being updated in real time so we are seeing the same things.” While Kumar accepts that renewals remain a “personal process”, there is clearly a need for more use of AI and other digital technology. But while data is becoming more real time, thanks partly to the use of AI, renewals remain a personal process. But there is still a need for innovation in the placement process and a more efficient process between broker and insurer where there is less rekeying. “It is really difficult to instruct our networks of insurers if we don’t have the right data,” said HDI Global’s Roque. “Renewal information is typically 60% of the information we got last year so rather than encouraging a data dump, we only focus on what needs to be updated.” According to Walker, more use of digital platforms would be a “huge leap forward”, while Evans called for the industry to move away from its “archaic use of technology” and embrace digital processes to “make everybody’s life easier”.

Insurers and risk managers call for early engagement on GPs

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