Outgoing Narim president urges buyers to look for positives in hard market

Adri van der Waart, outgoing president of the Netherlands association of risk and insurance management (Narim), has urged his colleagues to look at the potential benefits of a hard market, in his final meeting before handing over to Albert van Haastrecht. Van der Waart’s departure comes at a challenging time for corporate risk managers. The war in Ukraine has led many insurers to exit the Russian market while war clauses have been invoked on a number of policies. Cyber remains a major risk for all Narim members. Premiums are “sky high”, making cyber “almost uninsurable”. Furthermore, there is a fear that the losses sustained across the market as a result of Covid will keep premiums high for the foreseeable future. “Insurers indicate that they have to increase premiums due to the large losses due to Covid,” said Van der Waart. He said that $44bn in damages is still outstanding – the third-largest damages figure ever, after Hurricane Katrina and 9/11. This includes consequential damage as a result of Covid, such as a decrease in receipts and a loss of revenue. “Payments are made but those amounts are nowhere near $44bn,” said Van der Waart. “Last year during the Narim Congress, I already expressed the hope that the top of the hill in terms of high premiums would be reached. That turned out not to be the case. But luckily there is slowly but surely some peace on this front,” he said. The Narim meeting also highlighted the lack of standardisation in insurance terms and conditions, and an over-abundance of bureaucracy. “Conditions are being supplemented and tightened up. It is complicated red tape. Each insurer uses different forms,” said Van der Waart. “We recently spoke with the Dutch Insurance Exchange Association [the VNAB] and asked for more clarity. “It indicated that insurers all have their own wishlist, so simplification is not yet on the agenda. That's just the way it is. As a response to this, you see that more and more captives are being used to somewhat absorb this hard market,” said Van der Waart. Yet despite the challenges, Van der Waart called on his colleagues to remember that there are also advantages to the hard market. “The most important thing is that the role of the risk and insurance manager is increasing. We are looked after, there is more attention for the profession and we are taken seriously by the board,” he said. “We have learned from it – it is a circle – we go down, but also up again. The theme for 2022 is trust. This is the theme of the Narim Congress. Trust is important. Trust each other because that's what our profession is all about,” he said. Ten benefits of the hard market, according to Adri van der Waart: Recognition: the value of risk management Innovation: when the market hardens, that is when innovation begins Alternatives: increase use of captives, parametric insurance or capital markets Value for money: Your broker is your partner in all this – and now is the time to make them properly work for their commission/fees Personal recognition: As insurance cost increases start to bite, the CEO will want to know who you are (or at least the CFO will); take advantage of this raised profile while you can Coverage: Wordings become clearer and ultimately there should be a speedier claims process and less need for lawyers – which everyone should be happy about (apart from the lawyers themselves obviously) Partners: In a hard market, you know who your friends are Once bitten, twice shy: So now, all those short-term players have been weeded out and you won’t get caught again Us: It brings the risk management community closer together with a shared grievance Cycle: Many thought the cycle was dead because the last soft market went on for so long – but never underestimate the cycle.

Outgoing Narim president urges buyers to look for positives in hard market

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