The trend for change requires ‘speed’ and bespoke answers

The fundamental nature of businesses, organisational design, and structures is rapidly changing, which is also changing the nature of risk, Claire McDonald, HDI Global managing director UK & Ireland, told Airmic Today at the Airmic conference 2019.

HDI Global, an industrial insurance business, ran the workshop examining how changes in the supply chain links with cyber risk as technology becomes ever more sophisticated.

Using the example of a company using increased automation while also consolidating its sites, McDonald asked: “What happens if the supply chain is hacked? Businesses in that situation won’t have the duplication of supply or storage as everyone has been running things on a ‘just in time’ basis.

“The question is, what does that risk look like and what does the risk manager need to be thinking about?”

She said HDI Global has been having more conversations with clients around simplifying the insurance process.

Part of the solution, McDonald said, must be bespoke underwriting as no two risks are the same.

“You have to go into the nuts and bolts and then apply expertise and think about how that fits into your portfolio,” she explained.

Clients also want the process to be faster. One way HDI Global is achieving this is by customers issuing certificates through their own systems. She said this can mean considerable time savings and the concept of the process could be used with other clients.

McDonald also commented on how the insurance market has responded to recent cat losses.

“We are seeing a hardening of rates in the market which we have not seen for 18 or 19 years. The challenge for 2019 will be getting the book of business back to profitability,” she said.

Growth areas for the business are in “mid-corporate”, although she wants to keep the proportions of the business across the lines the same.

McDonald sees opportunities in the UK’s departure from the EU, as the company can do global programmes when things are not available through “freedom of service”.