Zurich Resilience Solutions to double in size as demand for risk advice grows

Zurich Insurance expects further growth in its Zurich Resilience Solutions (ZRS) business as boards increasingly look for outside help to understand and mitigate risks in today’s fast-changing landscape. Dirk De Nil, global head of Zurich Resilience Solutions, told Commercial Risk that the business is seeing strong demand for its fee-based loss prevention and risk mitigation services, which should translate into double-digit revenue growth over the next five years. “Since we started, we have grown revenues year on year by at least 20%, and our ambition is to continue to do that over the next couple of years as well,” said De Nil. “I would expect to see the business double over the next five years. The environment is quickly evolving and we think we are in the right place at the right time to offer our services,” he said. ZRS has its roots in Zurich’s risk engineering capabilities, which began some 75 years ago providing health and safety advice to America’s booming post-war construction sector. Risk engineering, which informs underwriting and provides risk improvement recommendations to customers, has since expanded into other lines, including property, casualty, marine, products liability and, more recently, cyber. ZRS makes around 30,000 risk assessments each year and issues some 50,000 risk improvement actions. With the launch of ZRS in 2021, Zurich began to expand into fee-based risk consulting. In addition to traditional risk engineering, ZRS has developed expertise and services in specialist areas of risk, namely climate and cyber. “The timing for establishing Zurich Resilience Solutions was highly opportune, considering the current global landscape, from the impact of geopolitical risks on supply chains, growing interconnectivity from technology, cyber and artificial intelligence. And then there is the climate. Last year was the first in which we had 1.5C of global warming compared to pre-industrial levels, and we can see the impacts everywhere in the world,” said De Nil. In recent years, ZRS has built out its climate and cyber resilience services, with more specialist areas in the pipeline, according to De Nil. “One of the areas we are currently looking at is risks that companies could face related to the use of artificial intelligence. We need to develop even more in-depth skills in that area as well,” he said. ZRS is also seeing growing demand for loss prevention and risk mitigation services around transition technologies, according to De Nil. “Another area we will be looking at related to climate is transition technology and sustainable energy, like hydrogen, wind, solar and battery storage systems,” he said. Zurich plans further investment in ZRS, according to De Nil, who took on his role in October 2023, having previously headed Zurich’s business in Benelux and the Nordics. “This is a people business. We added 100 plus people last year, and we are planning on hiring more risk experts in line with our growth plans during the years to come. But it is also about the technology. We are investing in technology to be more efficient, but also to provide tools and insights for customers,” he said. ZRS launched Climate Spotlight in December, a digital self-service modelling tool that helps mid-sized companies assess extreme weather and climate risks for given locations, across time horizons and climate scenarios. Large companies can also use the service. The business is exploring partnering with third-party service providers, and considering acquisitions. In 2023, the group acquired US cyber-intelligence firm SpearTip. It also partnered with sustainability specialist GoImpact Capital Partners to help businesses in the Asia-Pacific region build climate resilience. “We won’t go and buy a business just to grow ZRS. But we will keep our eyes and ears open, and see what is out there, and what can reinforce what we do, or complement what we do,” said De Nil. The core of ZRS’s business remains traditional risk engineering, but climate and cyber-related resilience services are growing faster. Risk engineering onsite surveys conducted by ZRS have grown by 23% year on year over the last three years. By comparison, climate resilience onsite surveys have increased ten times over that period. “In the grand scheme of things, ZRS’s main activities are still core risk engineering. But we have the ambition to make climate resilience and cyber resilience a much bigger area in our activities,” said De Nil. “Climate and cyber are areas that are growing strongly. For about 75 years we have been doing traditional risk engineering. We will continue to do that for underwriting and customers – it is the backbone of Zurich Resilience Solutions – but we need to further develop the other activities,” he said. Demand for ZRS’s fee-based consulting and services is being driven by today’s fast-changing and unpredictable risk landscape, and a growing focus on resilience, according to De Nil. “It’s driven by the boards. Ten years ago, boards were discussing globalisation and growth. Today they are discussing risk, business continuity and reputation: Can you afford disruption because you did not check the exposures of your suppliers? By building resilience, you can avoid business interruption in the first place,” he said. Companies are more willing to pay for advice and services where they see value, continued De Nil. “Boards realise how quickly the world is changing. People think more about whether risk transfer solutions are available, or whether insurance [for certain risks] may become more expensive going forward. So they are focusing more on resilience and prevention,” he said. Companies are approaching ZRS for help with identifying, assessing and quantifying risks, as well as solutions to prevent, mitigate and transfer, explained De Nil. “Quantification is something we are very focused on. At the end of the day, it costs money to build resilience. We need to be good at explaining the cost of not acting, and also at demonstrating the benefits of investing in risk improvement actions over time. Quantification of risk improvement activities – both severity and probability – is important, and that is what customers are increasingly asking for, and we can provide that,” he said. ZRS can help customers keep certain risks insurable and sometimes even make an uninsurable risk insurable again, explained De Nil. “We have risk data and insights that we can use to support customers, in a world that is changing rapidly and where some risks such as climate-related risks are becoming more difficult or expensive to insure,” said De Nil. “Therefore, building resilience becomes a key focus to help ensure that traditional risks like natural hazards and newer risks like cyber are insurable, and that cover is affordable,” he said. “For example, if we have a request for property insurance outside of our appetite, the company can work with ZRS and their broker to develop a plan of risk improvement actions. Over the past 36 months, in Spain alone we have supported 112 cases like this, where we were able to help make a risk insurable by Zurich,” he said. By offering loss prevention and risk management advice and services, ZRS can also help keep cyber insurance more affordable for some companies, explained De Nil. “We are working with companies to help build cyber resilience, training employees, carrying out penetration testing and helping companies quantify the cost of a cyberattack, including business interruption, response and recovery. By taking such measures, companies are more likely to become a better risk and insurable, which can help keep premiums at a reasonable level,” he said. “In cyber, there are also risks that are uninsurable, such as cyber warfare, because of their unquantifiable nature. So there is even greater incentive for companies and public entities to work with others to build cyber resilience,” said De Nil. Supply chain is another area where ZRS is seeing demand from companies for risk insights and services. “With just-in-time supply chains and lower levels of stock than in the past, supply chains are being disrupted more easily by natural catastrophes, political tensions and cyber. Supply chain is a very important area that companies increasingly ask us to look into – what are their suppliers and how are they exposed from a traditional risk point of view, but also a climate and cyber point of view,” said De Nil.

Zurich Resilience Solutions to double in size as demand for risk advice grows

Climate and cyber resilience services in focus

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