Lack of insurer innovation, claims and global regulation top poll of concerns for risk managers – Airmic survey
Innovation, claims and compliance top risk manager insurance concerns
Lack of innovation is the biggest complaint that risk managers have about the insurance industry, according to the latest annual poll of Airmic members. It was chosen by 26% of those who took part when asked which of fifteen aspects of the market most concerned them.
17% were most worried by issues related to how and whether claims are paid by insurers, whilst 14% cited the compliance of international insurance programs. The issue of ‘broker conflicts of interest and remuneration models’ was mentioned by just 8%. Once at the top of the list of buyer complaints, it is clearly not the hot topic it once was but has not entirely disappeared.
An illustration of the gap in the market’s ability to cover much of the corporate risk map relates to reputation. This was identified as a top-five priority by more than half the risk managers, coming second to catastrophe events. Yet only 11% of those who felt reputation to be important had bought insurance for it. The reasons for not doing so were overwhelmingly lack of availability (59%) and inadequate coverage (37%).
The majority of those who saw supply chain risk as a priority also decided not to buy cover for it, with high cost of insurance (40%) and inadequate coverage (40%) the main reasons.
Just over a quarter (29%) of those who took part in the survey reported having had a claim turned down, declined, delayed or reduced in the past three years. The main reason was the use of basis clauses or conditions precedent by insurers (31%), followed by late notification (28%) or the inability to provide information requested by the insurers (25%). These issues are all addressed in the Guide to Insurance Efficacy, published by Airmic.
Looking ahead, members were asked what they were planning to do differently at the next renewal. Changes to structure of coverage, including revised limits and deductibles, came out easily top (67%). Testing of claims scenarios to challenge policy coverage/wordings (something the association has been actively promoting) was mentioned by 42%, followed by upgrading the collection and presentation of disclosure information (another Airmic priority) and making greater use of a Captive, both 39%.
“These results show that we have been right to engage with the market about greater product innovation. I understand the difficulties that insurers face, but in my view underwriters need to be bolder. There’s a huge gap there for underwriters to fill if they can get it right,” said chief executive John Hurrell.
The survey took place in late May and early June, with 110 members taking part.