The insurer’s perspective: HDI Denmark

Adrian Ladbury covers the questions in this year’s European Risk Frontiers survey with Michael Klitvad, managing director for HDI Denmark, the local representative of this year’s survey sponsor. Adrian Ladbury [AL]: Will the corporate insurance market harden this year in the Nordic countries? Is there adequate capacity for customer risks in this region and in which areas do you see demand for more capacity? Michael Klitvad [MK]: The Nordic insurance market is not one but four markets: Norway, Finland, Sweden and Denmark (Iceland being very small), each with individual characteristics. These markets are highly competitive and premium rates have decreased for several years. We at HDI Denmark see a minor shortage in capacity, but only for accounts with negative loss ratios and for specifically exposed and technically challenging risks. The majority of the risks in the Nordic market are insurable in terms of price-risk ratio. HDI Denmark has been in the Nordic markets for many years and knows these markets very well. Up until 2014, we operated in a few selected areas such as professional liability. In 2015, we decided to expand and went into the industrial insurance market with the fully fledged product portfolio of an industrial insurer. We have since experienced strong growth in the markets, servicing a number of the top 500 Nordic companies. Many large Norwegian, Finish, Swedish and Danish companies are highly export-orientated, exporting up to 98% of their sales to countries all over the world. Our ability to offer all industrial insurance-related products, in addition to existing financial lines, therefore proved to be a real advantage when coupled with HDI Global’s network, which serves Nordic international programme clients in more than 150 countries. AL: Are supply chains adequately insured? What is needed to make them more insurable? [MK]: The biggest challenge for risk managers, brokers and insurers is to properly understand supply chain risks. Supply chain interruptions could be fatal if not dealt with adequately. Through the large number of customers in our portfolio and our broad experience from almost all sectors of business, HDI Denmark has gained a decent level of insight into the risks faced by our customers, be it risk management driven from a customer’s perspective or externally driven, such as natural catastrophe risk. We have developed a supply chain analysis tool for property insurances and this enables our clients to identify areas in which an increased risk of contingent business interruption losses exist, because these risks can be properly classified and mitigated. AL: Do you believe that cyber cover is adequate to meet customer needs? [MK]: Every company must understand that they can suffer cyberattacks every day. Cyber is a business risk that requires high-level attention because it has the potential to affect all areas of business. Fortunately, many, if not most, companies in the Nordics are aware of the situation. It is no longer a hush-hush thing when a company has been targeted. The result of this awareness is that this year the number of new clients in the Nordic countries that have signed up for HDI’s cyber coverage increased for the first time to a figure in the low four-digit number range. The primary focus of industrial companies should be the internal mitigation of risks and ‘IT housekeeping’ before they come to the insurance market for solutions. AL: How could insurers and brokers work more effectively with risk managers to develop more comprehensive cyber cover with higher limits? [MK]: We encourage clients to work even closer together with brokers and HDI Denmark compared to other lines of business. The ever-changing cyber landscape needs to be monitored closely. Furthermore, transparent information on cyberattacks and exchange between customers, brokers and insurers would help better understand and qualify claim scenarios, identify potential coverage gaps and mutually work on more tailor-made coverage components, including the possibility of increased coverage limits. AL: How could and should the insurance market deliver a more certain and consistent service on claims? [MK]: A consistent service with first-class handling on claims is without doubt the core service provided by us as an insurer. For consistency purposes, HDI Denmark always has used, and will continue to use, our own claims handlers, lawyers – including our own US-certified lawyers – and loss adjusters, in all the branches and subsidiaries of HDI Global worldwide. That said, it is important that we work very closely with insurance brokers in the four Nordic countries. An ongoing and substantial investment in technology is also critical to delivering superior service. AL: How would you make global programmes work more efficiently? [MK]: Our experience is that the worldwide presence of HDI’s own global network makes a substantial difference when we serve our global clients. The number one KPI for delivering efficient service using a global network is timely exchange of information between the client’s risk manager, broker and insurer. We know that lack of information, or incorrect information, is one of the main reasons for difficulties in handling and administrating global programmes. To handle global programmes in a more efficient manner requires a state-of-the-art global programme insurer, but also the ability of other key stakeholders, such as the client and broker, to cooperate in a transparent and rapid manner.

The insurer’s perspective: HDI Denmark

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