Spotlight falls on UK risk managers to boost resilience amid supply chain crisis

The current crunch in global supply chains and disruption to multiple UK sectors and their customers could ultimately make businesses more resilient, according to Marsh’s chief client officer, UK and Ireland, Ailsa King. Speaking to CRE ahead of the Airmic conference, Ms King said risk managers have taken on higher-profile roles since the pandemic and the current supply chain squeeze has kept up that momentum. “Risk managers have the opportunity like never before to join the dots between risk and mitigation. Risk managers have grabbed hold of the challenge and are making the most of the opportunities,” Ms King said. By headlining UK newspapers, supply chain disruption and risk have made their way into common parlance and pushed the role of risk management to centre stage. “Risk managers are in the limelight like never before,” Ms King said. With so much attention, risk management has risen to become top of any c-suite agenda, she added. The pandemic, and now the impact of global supply chain challenges, will redouble efforts to build more resilient operations. Ms King said UK businesses are already taking more control over elements of their business models exposed to supply chain disruption. A Marsh client heavily reliant on HGV drivers recently invested in a new logistics model, in direct response to the current crisis. “In the short term this will alleviate issues with driver shortages, but in the longer term they’re building a more resilient business,” Ms King said. More executives and senior management are joining the risk discussion. Ms King said every week she is seeing more c-suite colleagues taking part in these conversations with brokers and underwriters. RENEWALS As Airmic gathers for its first in-person conference since the pandemic, Ms King said the risk industry has suffered during remote negotiations around renewals. These remote discussions have been made even more challenging in the current climate of rate increases, tighter terms and closer scrutiny of contract certainty, she added. UK buyers have found underwriting “a source of frustration” during the past 18 months, Ms King said, with “the wheels turning more slowly in places, in the absence of face-to-face meetings”. She has seen different outcomes for buyers and underwriters who meet via remotely-held negotiations and presentations. Underwriters who sit around the table with clients gather more detail about the risk, Ms King said. “Online presentations lose something from the communication style and sharing of information, and the story behind the data points,” she said. Meanwhile, the fallout from Covid-19 business interruption policies and tighter underwriting has led to greater scrutiny of risks and the way they are managed, but Ms King said greater contract certainty has not necessarily followed suit. “Contract certainty has actually deteriorated in some places,” she said. Marsh is working with carriers to “get ahead” of certificate issuance and policy terms and conditions before the renewal date, to give clients a clearer picture of their coverage. But brokers and insurers are driving forward innovation to help close gaps in client needs, Ms King continued. She said “interesting developments” are afoot in mitigating client reputational risk and more solutions are underway to address digital business risk. “We’re certainly seeing innovation from some insurers…parametrics are much more varied in design,” Ms King said. Alongside this, insurers are being driven forward by competition within their own sector. Ms King said the UK is still an attractive insurance hub for international buyers, but innovation will be a defining factor. “Continued innovation – in order to stay relevant to clients as they adapt to a new world of risks – is essential if London wishes to retain its crown in the longer term,” Ms King said. D&I CHALLENGE Supporting a more diverse and inclusive workforce is also an opportunity for the insurance industry to be more relevant and dynamic. Ms King, a board member for Women in Insurance’s ISC Group and an advocate for neurodiversity, said progress on gender diversity has to be replicated with the same fervour on race and social inequality. For the insurance market, attracting a younger workforce will serve to both help the industry stay relevant and also provide opportunities for young people disproportionately affected by the pandemic. “We need to redouble our efforts and focus on attracting more young people into the insurance industry,” Ms King said. She explained that Marsh expanded its graduate programme this year to take on 65 graduates, from 50 last year. “Key to our industry’s future success is attracting more young people into our ranks, if we are to keep gaining ground and create meaningful, long-term change,” Ms King said.

Spotlight falls on UK risk managers to boost resilience amid supply chain crisis

Remote working has hindered renewals

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