Many board-level risks are still not insurable: Airmic CEO

The insurance industry must redouble its efforts to maintain its relevance as an increasing number of board-level risks do not have an insurable solution at the present time, according John Hurrell, the outgoing CEO of Airmic, the UK’s risk management association.

Speaking at the Airmic Conference 2017 this week in Birmingham, Hurrell outlined a number of themes identified in a collaborative study with research firm Longitude, which point to significant opportunities but also potential threats in the transformation of the insurance and risk management professions.

“The risk landscape is moving faster than ever before and in many dimensions at the same time,” said Hurrell. “Some key trends include globalisation, digitisation, the trend towards intangible assets and global reputational risk particularly recognising the impact of social media as is evidenced in almost every corporate crisis. This requires a greater focus from all of us on the integration of the approach to risk and the breakdown of any silo mentality between functions.”

He suggested that risk is now firmly a boardroom agenda item, which is often also vital in underpinning overall corporate strategy.

“As a profession, we are often too focused on prevention rather than as a supporter of the business,” he continued. “There appears to be a bit of a vacuum in the corporate space marked ‘Risk management as a business enabler’ which we believe our members can potentially move into.”

Respondents to Airmic’s survey said they saw potential for the dramatic increase in the availability and use of data, to help them model and manage risk exposures, and for insurers to create affordable and valuable products, which aim to meet the needs of the modern industrial and commercial world.

Hurrell added: “There is a critical requirement for all of us the embrace fully the opportunities afforded by the exceptional and exponential expansion of the access to and the analysis of data.”

He said the survey also highlighted the growing demand for the provision of specialist unbundled risk services, particularly with emerging risks such as cyber exposures.

The recent malware attack ‘WannaCry’ and the disruption of British Airways from an IT failure he suggested illustrate how risk maps are changing beyond all recognition and present a real opportunity for both Airmic members and the insurance market who support them.
Airmic is expected to publish its full report later today (Monday June 12).

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