Process improvement should be number one focus for insurance market–Switzerland

The risk managers also agreed that improved contract certainty, transparency and a global footprint to service international risks are critical in today’s market. Stuart Martin of Bombardier said: “Processes, policy, wordings and invoicing are the key words. I want my policy in 30 days not 120 and when I make a payment I want it to happen immediately. The back office needs to be as flexible as the front office.” “I need coverage quickly for things like intellectual property, which is becoming increasingly important for all of us,” said Sabrina Hartusch of Triumph. “Why can’t existing insurers include this quickly? This is about flexibility and treating customers more as customers and not taking a line of business approach,” she added.hideDominik Ebneter of Swissport International agreed that process is key and flagged up the need for a more industry-specific and flexible approach from insurers. “For the past five years I have been calling for more flexibility in the process. The insurers need to amend the coverage for key areas such as contingent business interruption to the specific industry. Our industry is different to other industries and so insurers need to find better solutions. But if we take it up with our insurance partners it usually works out well,” he said. “We recently had a claim that involved big discussions about whether we were covered or not because half a sentence was missing. Because of that the insurer tried to avoid writing out the cheque. This really is a relationship question and about buying power and negotiation. If you have the power then things suddenly go the way you want it to and should have gone from the start,” continued Mr Ebneter. Maurizio Micale of STM said that he had always tried to clarify clearly what he was buying because of the relative lack of contract certainty inherent in insurance. “In my opinion, the insurance industry should be more efficient. We need more certainty of coverage and ultimately more transparency on policy wordings. For instance, business interruption coverage is quite a grey area and hopefully it should be standardised. Today, corporations are obliged to file balance sheets according to US GAAP and/or IAS/IFRS accounting standards and principles which have been designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries. So I do not understand why the insurance industry finds it so painful to clarify BI and CBI adopting global accounting standards and principles,” he said. Mr Ebneter pointed out that a form of standardisation has been available in the London market for many years for large capacity risks such as aviation. However, he added that he has moved away from the London market because the primary liability market was not set up for his needs because of a lack of a global network. He said he needs support in 48 different countries for this coverage. He still uses excess capacity on a standard wording basis in the London market. Mr Martin said that he was surprised by Mr Ebneter’s problem with London as he knew of other aviation programmes placed in London with similar global footprints. Mr Ebneter said that the problem was that the broker had to find local coverage in each territory covered as well as the central coverage in London. He had to pay 100% of the premium to the London market and then the subsidiary had to pay 100% to the local insurers. Then the broker had to collect the balance from the local insurer and pay it back to him which made it all very time-consuming and costly. Both Mr Martin and Mr Ebneter agreed that the best solution to this problem was to use a big international insurer with offices on the ground across the world. “Footprint is more and more critical. Global insurers are able to give direct access to new markets such as India, or they have a fronting partner so you can go straight there. We do not want to use a local insurer that has no credit rating or an odd approach to paying claims. One problem that this creates, however, is that you can only really use one of two brokers and they are both as bad as each other!” concluded Mr Martin. HDI-Gerling is as aware as its rival insurers that it needs to expand its global footprint and meet the demands of major customers. It has recently invested in emerging markets such as India. Hans Mazenauer, head of the firm’s Swiss office, said he recognises that the insurance industry has significant potential to improve its servicing efficiency. “We can certainly further digitalise, but at the same time there will always be the need for individual and tailored products especially in the large account area,” he said.

Process improvement should be number one focus for insurance market–Switzerland

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