12 December 2013

CRE: Hurrell challenges insurers and brokers with five requests for New Year

John Hurrell, CEO of UK risk management association Airmic, has delivered a list of five requests to insurers and brokers that he believes would hugely improve the lot of risk managers in the New Year.

Mr Hurrell challenged the risk transfer industry to invest in more expert staff to help keep pace with economic and business model changes, integrate risk and insurance services more effectively, revert to the use of tailor-made policy wordings, deliver contracts at inception of the policy and treat the renewal process as a continuous discussion rather than a single event made in a last minute rush.

He issued these challenges because Airmic members are worried that as the global economy rapidly changes the insurance industry is in danger of losing its relevance if it fails to evolve at the same pace. "The problem is that most of the products that are made available by the insurance industry are products that could have been bought a quarter of a century ago. If the insurance industry does not maintain its relevance, in the same way as Amazon has achieved through constant reinvention for example, then the products will become commoditised. If this happens then the market will be even more price-driven than it is today", he explained.

Mr Hurrell recognises that the five suggestions he has put forward to help the industry rise to this challenge are not easy to achieve and expensive. It will be quite a challenge for the industry to react overnight, he accepts. But if the sector wants to remain relevant and keep up with customer demands then it needs to make a start, he said.

• The first challenge is for insurers and brokers to invest in the staff and expertise needed to tackle the difficult new risks thrown up by a changing economy and rapidly evolving business models.

• The second recommendation, that AXA CS' Paul Lowin had proposed earlier in the day, is that insurance risk services need to be better integrated.

• The third recommendation was on policy wordings. "Revert to tailor-made policy wordings. I think contract certainty resulted in increased speed but not necessarily improvement in wordings", said Mr Hurrell. "I think that we probably do need to look at where the wordsmiths are that we used to have and invest in relevant policy coverage on a dedicated basis", he added.

• The fourth recommendation opened up a debate on the renewal process, which has dominated an increasing number of discussions at industry events over the last year.

• Fifth and finally the renewal process is far too concentrated at the moment. We believe that there should be a continuous dialogue between insurers, brokers and policyholders that recognises that businesses are changing very rapidly", said Mr Hurrell.

Full article

© Commercial Risk Europe