Protecting against the top three risks climate change, political risks and cyber threats

How will the combination of AXA and XL benefit French risk managers?

This is the first AMRAE Rencontres that we are attending as AXA XL and we are excited to meet with our clients and brokers in Deauville.

AXA XL gives French risk managers access to one of the broadest speciality risk portfolios in the market –including crisis management and political risk solutions– and strength and depth in established lines of insurance, such as property and liability.

In addition, the combined AXA XL can help clients with the most complex of risk transfer solutions, such as global programs, captive management, structured (re)insurance solutions and parametric insurance and reinsurance.

What are risk managers telling you are the risks keeping them awake at night?

An important part of my role is spending time with clients and brokers to talk about the risks that worry them the most.

We are increasingly hearing from clients that climate risks are among their biggest concerns. According to a study by the Fédération Française de l’Assurance, the costs to French businesses linked to damage caused by drought, inland and coastal floods, and wind have risen consistently over the past 25 years.

Weather-related events are a concern for businesses of all types, but notably for those in sectors that are directly affected by climatic conditions, such as agriculture, renewable energy and tourism. For these types of company, one of the biggest challenges is the difficulty for insurers in modelling the impact of climate events on a company’s operations. One way that insurers –among them AXA Global Parametrics– are tackling this issue is to develop parametric solutions that indemnify a client automatically should a certain trigger be met.

Political risk is another hot topic for risk managers. French companies are asking themselves what the impact on them would be if, for example, an overseas government nationalised the sector in which they operate. Some insurers, including AXA XL in France, can provide political risk coverages that protect against the risks of expropriation, nationalisation, forced abandonment, political violence and contract frustration.

Political violence and terrorism continue to be big risks that our clients are forced to think about. Insurers can offer a suite of products that cover crisis management, kidnapping and extortion, terrorism and loss of attraction.

What future or emerging risks should risk managers be aware of?

As well as opportunity, new technologies bring with them a host of risks.

Let’s look at two examples. Firstly, more and more start-ups are joining the so-called sharing economy whereby services and transactions are paid for using online platforms or Apps. These services pose new questions about public liability or damage to goods for which many insurers don’t yet have answers. Over the past year, AXA XL has worked with numerous sharing economy start-ups to devise an insurance coverage for their users.

A second area to consider is autonomous vehicles. These have been a hot topic for some time, and many companies have been experimenting with this technology within their own organisations. While most of these trials have taken place in closed environments like factories or campuses, they are not without risk. For example, if an autonomous vehicle damages or destroys some valuable equipment, who is liable? The manufacturer of the vehicle, the sensors on the vehicle, the software developer or the owner of the warehouse?

Since last year, AXA XL has offered an autonomy product to support the adoption of this technology. We have, for example, insured a trial of autonomous taxis in London and shuttle vehicles at Heathrow Airport.