Collins on how insurers are keeping up with complex risks including reputation, cyber and supply chain
What are the key risk management trends that you’re seeing at the moment?
There is a lot of pressure on insurers to grow; it’s a very competitive market. Insurers are keen to work with and hold on to well risk-managed clients and likewise well risk-managed clients are keen to show us and the insurance market how they are managing their risk and exposures.
Risk management is getting incredibly complex in terms of the risks they face do you think the insurance industry is able to keep up with mitigating some of the risk for them?
The complexity of risk is changing and what I class as emerging risks around supply chain, cyber, which are, in fact, long-established risks are moving more to the forefront. So for insurers, it is about trying to adapt [insurance solutions] around those risks and make the insurance industry relevant to customers. At Allied World, we are continually adding to our product range.
You mentioned cyber and supply chain; do you rank them as the top risks that businesses are facing?
Insurers and the wider community have conducted a number of polls and what we are seeing from these is that supply chain is undoubtedly very high on the list of risks that businesses are concerned about. Allied to that are [threats connected to] emerging markets and the socio-political environment. Reputational risk has also come to the forefront. Take the recent horsemeat scandal. The reputational damage to businesses affected by that scandal was enormous, both to their brand and their share price.
You talked about reputation risk, how do you assist your clients in terms of managing that particular risk?
Understanding within the framework of insurance what the related risks are. It is also essential for clients to understand the importance of managing reputational risk and getting them to buy into broader risk management – prevention is better than cure. Equally as important, to on how to communicate with media and social media.