More protection equals better risks

Commercial Risk Europe talks to HDI Global Italy’s Alberto Bellomi about the risk management role in an increasingly complex world.

With all of the recent challenges and uncertainties ahead, Alberto Bellomi, managing director at HDI Global Italy, believes risk managers are indispensable. “As an industrial insurer, having a professional partner who is increasingly involved and sensitive to the current complexities is a great asset,” he says.

The world is becoming more complex. It’s been said a million times but that doesn’t make it any less true. With regard to the exponential rise in complex risk, Alberto Bellomi believes that natural catastrophes are one of the biggest of our time because they are so difficult to predict. “Models are shifting fast. What was seen as a 100-year event a few years ago is now being forecast to be more common,” explains Bellomi.

“Against this background, property rates will continue to increase this year, especially around nat cat exposures, as global insurance capacity is shrinking and exposures are rising. At the time of renewing our reinsurance treaties in January, we as a company were already faced with heavy rate increases due to nat cat exposure. We also observed that alternative capital providers had apparently found better investment options,” he says.

Cyber also ranks high on the risk list, particularly since Covid-19 and the war in Ukraine began. In recent years, the insurance market in Italy has witnessed an uptick in companies wanting to upgrade their cyber policies, not just in the large corporate sector but also medium-sized firms, which are common in the Italian economy. “They want to have a proper cyber policy in place and are actively requesting consultations,” says Bellomi.

“HDI Global’s approach blends traditional risk transfer with risk prevention, mitigation and advisory services to reduce the frequency and severity of losses, and doesn’t just provide pure insurance risk transfer for the worst case. Risks have changed dramatically over the past ten years – in cyber they change every month. To support our clients, we are investing in hiring a lot of experts in this sector. But we also offer seminars and webinars that attract many participants including clients and brokers,” he adds.

Political violence

For international companies, geopolitical risks pose an additional threat. “We are quite active in offering insurance coverage for a broad range of political violence risks,” Bellomi says. “Many of our Italian clients work abroad and must be aware of the respective local political situations. The reason is simple: the financial impact of a crisis can be severe on any company or manager.”

In terms of general outlook, Bellomi expects the Italian market will remain hard with no fall in prices. “While the Italian market is not as hard as it is in northern Europe, we are still seeing some hardening, especially in property due to the nat cat situation,” he says, referring to the recent flood in the region of Emilia-Romagna. Corporations with complicated risks abroad or active in regions with high nat cat risks are particularly affected.

Some hardening can also be observed in group personal accident insurance solutions due to an increase in attritional losses. Bellomi attributes these to the end of Covid-19 lockdowns as people are pursuing normal activities again. Similar rate increases apply for motor insurance after 2020/21. “During the pandemic we saw a decrease in motor claims due to the reduced traffic. Now the situation is back to the status prior to Covid-19,” says Bellomi.

No client is pleased about price increases but Bellomi believes that most risk managers and brokers are aware that rates had been very low for several years. “Clients understand the reasoning behind the price increases because HDI Global has always kept a consistent approach and is in the position to explain those developments,” he says.

In addition to price adjustments, he expects some restriction in capacity after primary insurers went through difficult and costly reinsurance renewals. This led to higher retentions on property catastrophe programmes that are now more expensive.

Bellomi believes the development of captives in the Italian market is positive. The managing director of HDI Global in Milan thinks that captives are a win-win situation for insurers and clients alike. “Clients who retain more risk and use the full potential of their captive within their risk management process often see an improvement in risk quality,” he explains.

“I’ve seen enormous improvements in risk mitigation measures as well as increased cooperation and better alignment between the insurer and the insured. That results not only in better protection for our client but also in a better risk for us,” says Bellomi. “Not only do we have centres of competence for captive services and solutions at our head office in Hannover and at our entity in Paris, we also have captive experts in additional countries such as Belgium or the US, just to mention two, who work together for clients with captives across borders throughout the world,” he adds.

International insurance programmes

HDI Global is currently the lead insurer for approximately 5,000 global insurance programmes worldwide. These include nearly 28,000 local international programme policies, which are serviced by more than 175 HDI Global Network partners and more than 170 in-house risk engineers. “We are one of the few and one of the most capable industrial insurers in the world for the service needs of international clients due to the comprehensive and efficient HDI Global Network we have created,” says Bellomi. “Our Italian location is among the top five producing offices of international insurance programmes in our group. Many Italian businesses go abroad, which is typical for our kind of economy.”

When it comes to navigating the complexity of international business activity, Bellomi is aware that even the most experienced risk manager can’t know everything. “As an insurer, we are able to offer insight and provide suggestions, which is an added value that the risk manager really appreciates. Plus, we guarantee that our insurance solutions are fully compliant, which means constantly remaining up to speed about new local legislations or restrictions,” he says.

Insurance Academy

To better provide top-tier services, HDI Global invests in talent and training. “Our academy offers participants the opportunity to exchange knowledge as well as develop and practice skills,” says Bellomi. “This allows us to facilitate the exchange between people and countries, to also benefit from best practise examples in other countries as well as strengthen our network.”

Bellomi is amazed at what HDI Global makes possible for its people. “We offer so many opportunities for our talents to grow that I would like to be young again just for this reason. I look into the eyes of younger colleagues and see how happy they are when they realise how much they can grow within a very short time, especially if they are passionate.”