Mahnke demands rethink on claims and renewal of partnership

Corporate and industrial insurers need to take a less confrontational approach to claims or risk even further long-term damage to their reputation and relevance, according to Alexander Mahnke, president of the German risk and insurance management association GVNW. GVNW members are meeting in Munich this week for their first face-to-face annual Symposium for three years, and are preparing for what is likely to be another tense and often challenging round of renewals in Germany. It is hoped that the worst of the ‘market correction’ seen in Germany for the last four years is over and more stable terms and conditions can be expected by the country’s leading corporations. The big carriers have published decent underwriting results in recent quarters, driven by higher prices and more restricted coverage, particularly in critical lines such as property, D&O and cyber. But insurers continue to point to the pressure imposed by fast-rising inflation, volatile investment market conditions, supply chain woes and the impact of climate change-related exposures, as justification for maintaining a firm stance in future renewals. Mahnke has said consistently that he understands insurers need to make a decent return, and that a market correction was needed back in 2018. But the GVNW president has also complained loudly about the often irrational, sometimes brutal and poorly communicated approach from many leading carriers in recent times. During his opening speech at the Symposium, Mahnke said claims are one area where things have become unacceptable. This needs to be rapidly addressed, he warned. “The processing of complex claims is critical. Here, insurance companies can score important bonus points with customers by focusing on their needs but unfortunately this is too often not the case,” said Mahnke. “All too often the lawyers are mandated at the drop of a dime and problematic negotiations start immediately when in most cases the claims should be paid immediately. This leads to questions about why companies should buy insurance in the first place. A positive claims experience is more important than ever in a harsh market,” he continued. The GVNW president again took the opportunity to remind insurers that risk and insurance managers have long memories and will remember those that dealt with them well and those that failed to live up to the partnership concept during this harsh market. “I would like to point out that in two years’ time this market could change quite dramatically. But customers will think back to the hard market and remember who proved to be a real partner and who didn’t,” said Mahnke. The GVNW president took the opportunity to remind insurers that their leading customers want to see a vastly improved approach to digitalisation, cost efficiency and, above all, innovation in challenging areas such as cyber and non-damage business interruption. Risk managers also want to see a more coordinated and joined-up approach from the insurance market in terms of processing, administration and communication. This need has become more pressing than ever during the harsh market, when risk managers and their brokers have had to build fresh programmes with more and more carriers to secure capacity. GVNW members also want to see their carrier partners step up to the plate and craft innovative responses to their evolving risk challenges, rather than hunkering down into exclusion mode. “The market needs to be brave and seek to accept risks. Insurers can’t just say no and exclude these business-critical risks. Yes, the insurance market is still in a perfect storm of course following the pandemic and then the war in Ukraine. But we need to see innovation. We need to pull together to master all these challenges and ensure the very survival of this market,” concluded Mahnke.

Mahnke demands rethink on claims and renewal of partnership

Future relevance of insurance at stake, warns GVNW president

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