Is insurance fit for purpose?

What would you say are their top three biggest risk concerns?

Political and economic uncertainty continue to challenge many of the industries and businesses we serve. These, coupled with maintaining an understanding of new and intangible risk exposures means that clients have more regular and wide-ranging conversations with their brokers and with us. Addressing key risk concerns, like cyber, reputation and intellectual property, depends on this type of collaborative approach.

What does this tell you about how the risk landscape has evolved?

It tells us that nothing remains static in the risk landscape and that change is the norm. Emerging threats, or threats to intangible assets can be much more complex than traditional risks. Understanding the impact of those changes now has attention at c-suite level as well as within risk management functions.

So, how are you innovating to help risk managers deal with the evolving risk landscape and 21st Century risks?

We have invested in our digital risk services to ensure risk managers have guidance at their fingertips and we continually develop and evolve the tools and services we make available in our Risk Reduce portal to meet the fast pace of change. Our risk engineers have continuous personal development plans to ensure they keep up with the latest thinking.

There has been a big shift from businesses owning tangible assets to intangible assets. What are the biggest challenges with managing these types of risks?

Despite the prevalence of intangible assets in a company’s “book value”, the specific quantum of the individual parts of this sum are frequently difficult to identify, track and assign values. The values are subject to change, according to market drivers. Certainly it can be both time consuming and theoretical to attribute value across a company’s intangible asset base easily identified as a fixed asset, quantified in everyday accounting principles, in need of protection or whose loss clearly impacts the bottom line profit of a business. Given the expertise required, and the changes to value over time, pursuing courses of action beyond identification on a risk register can be challenging. Furthermore, and probably because of these challenges, the development of risk management services including advice and the availability of insurance cover have developed more slowly than for tangible assets.

Few insurers offer adequate insurance to cover risks to intangible assets. So, how you helping business deal with risks to intangible assets?

With an eye on innovation both of our insureds and the insurance market, we provide coverage in areas such as intellectual property, reputational harm, cyber and trade-disruption cover – from both a first and third party perspective. Our underwriters are highly knowledgeable and experienced, based on Liberty’s commitment to these classes for many years. We propose specialist insurance solutions to companies operating in an economic environment that is both dependent upon intangible assets and increasingly subject to non-physical perils. Whether a business is competing in an innovative market, reliant upon IT networks and outsourced business processes, or operating with a just-in-time supply chain model, we recognise that the biggest risks to a majority of businesses have significantly changed over time. We also recognise that no two businesses are the same. Our approach is threefold: to build a deep knowledge of our insureds’ businesses; be innovative and flexible; and offer creative specialist insurance solutions to protect our clients’ most critical assets.

This year’s Airmic conference is themed New world, new solutions. It couldn’t be a more apt title to summarise the discussions taking place at the conference, a lot of which is based on change – changing business models, changing risk landscape, change in risk management. How has the brave new world affected insurers?

In many respects, it’s made insurers more self-aware. Our ability to see and understand what’s happening in the world around us has grown exponentially. We know that our clients want more from us; we know that insurance industry service standards can fall short when compared to other sectors that have adopted new technologies and business models; we know that our market is ripe for disruption by external players. The focus now is on how we react to these pressures. Amazon is a prime example. It’s been successful in most of the niches it’s occupied yet behaves in a way that turns many business homilies on their heads.

…and because change is such a big topic, StrategicRISK has launched two campaigns – #ChangingRisk, to inspire new thinking in risk; and #ChangingInsurance to discuss how insurers are innovating to help meet the evolving needs of risk managers. What is your vision for the future of insurance?

This is a turning point for the insurance industry. Long-talked about modernisation is starting to happen: InsurTechs are bringing new ideas; Lloyd’s has a bold new vision including implementing digital transformation; we’re seeing greater diversity and new skills coming into the industry. These changes and more point towards a future where the industry benefits from innovation based on creative thinking, enabled by technology. Our challenge as an industry is to step up and find solutions fit for the future.

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