Marsh’s chief client officer Ailsa King said insurers will put more focus on risk mitigation efforts to cope with intangible risks
The growing significance of intangible risks means insurers will need to transition towards playing a bigger role in risk management.
Marsh chief client officer Ailsa King argued the challenge posed by intangible risks, combined with the evolving role of the risk manager, meant insurers had to adapt.
She suggested insurers would meet the intangible risk challenge by putting more onus on rewarding clients – through better pricing – in return for risk mitigation efforts.
“I think insurers will meet the needs of intangible risks,” King said. “We don’t see it at the moment, but I think they will start paying clients for having good security and protection.
“Usually that way of thinking is alongside your traditional insurance policy, so there would be the policy and the premium, but there would also be a fund that is going to reward you for better protecting your organisation.
“We’re going in that direction, but it will be interesting to see when insurers do become more a part of the risk protection piece, rather than the just the paying at the end once it has been proved the claim is valid.”
King was speaking at this year’s Airmic conference, where insurers have already come under fire from risk managers for failing to meet the intangible risks posed by new technology.
But she said it was part of the evolving role of the risk manager that there is a greater emphasis on risk mitigation – rather than just relying on insurance – than ever before.
“There are a lot more qualified risk managers coming onto the scene, not pure insurance buyers,” said King.
“We are now at a stage where we are going beyond what we traditionally think of as the risk manager role, which tended to be ‘here is an assessment of where the risks are, here is what’s transferable, here is what you can’t transfer to the insurance industry,” she said.
“It’s broadening and there now requires a lot more detail around what their strategy is going to be and it’s not just going to be around the tangibles,” King added.