Why partnership, communication and managing risk, are key to tackling the harsh insurance market

In the past 18 months Airmic quickly moved its operations online, hosted roughly 100 virtual events and took the brave and successful step of hosting a physical conference. Its CEO Julia Graham looks back on the lessons learnt from the pandemic and offers hope for the future.

In the face of the current harsh insurance market, Airmic chair Julia Graham has some words of hope. She believes there are signs of recovery but emphasises that insurers, brokers, and customers need to work together to achieve sustained improvement. It’s never been more important to take a partnership approach.

From the insured’s point of view, the key is risk management, great risk managed businesses are typically great businesses, and compelling presentation of this especially from the top management of an organisation, makes for a more attractive proposition for the insurance market and demonstrates that managing risk is taken seriously.

“We encourage our members to take the initiative to communicate and drive the value of their approach to risk management, and not be a victim to market forces. It’s all about risk,” she says. “If you manage risk well and document clearly what you’ve done, you should be able to differentiate yourself. I think there are green shoots of recovery for businesses that are run well, because that’s who everybody wants to deal with. Although we’re still battling to do business during the pandemic, and all organisations have been under intense pressure to innovate in order to seize opportunities as well as to survive, it’s essential for the drive for change and pursue high standards, to continue, even as the market improves.”

Her words come at a time when the insurance market is still characterised by price hikes, reductions in cover, increased deductibles, toughening up on some wordings and exclusions, downsizing of insurance programmes, and some insurers retreating from certain covers altogether.

“Everybody has been chasing after the best risks,” says Graham. “and some buyers are  angry with insurers they've dealt with for years, who they feel have abandoned them, but we're in partnerships, and partnerships are a little bit like a personal relationship - sometimes you hit bad points and sometimes you have fantastic points, but a really strong relationship is about working together.

“If we truly mean that as customers we want to be partners with insurers and brokers, we have to work with each other. We also have to be honest and feel that thoughts about what's good and what's not good are welcome.”

Airmic’s recent conference in Brighton put that into practice, and Graham reports that members have largely felt well supported by their partners in the insurance industry.

“I think generally insurers and brokers have acted as partners and are by our side. And there are some very exciting developments taking place, as the market moves more towards supporting risk management and developing education programmes, tools and techniques rather than a focus on respond and pay. Talk of insurers and brokers breaking down their internal business line silos is also good news for customers who look at risk at an enterprise level.

“Looking forward, the pandemic should be the stimulus to reinforce our relationship with our partners and take the lessons we are learning and apply these to create a better future.  We want a strong and confident market to be there for us.

“But is the insurance market moving fast enough? I worry about the ability of the industry to keep up. If a lag develops between change in the industry and change in its customers, our members may be driven to look elsewhere for solutions that are more fit for their future and ones that are unencumbered by legacy systems and crippling overheads,”

Airmic’s 2021

The Airmic conference in October was a decisive move back to a physical event after a year in which Airmic worked hard to support its members and work with its partners remotely.

“We were very agile,” says Graham. “We had invested in portable technology and we switched to Virtual Airmic within 48 hours. Learning and development programmes and sessions, opportunities for people to meet in sector or subject interest groups or over virtual roundtables, provided greater accessibility. Now people don’t have to give up half a day to go to a one-hour meeting, our attendance rates have rocketed. Our 2020 virtual conference Airmic Fest attracted over 2,000 attendees.”

However, even the best platforms can’t replicate the human touch of networking. Airmic recognised that there is sometimes no substitute for face-to-face contact and there was a strong desire for a physical event, so it took the brave move of holding the conference in Brighton during October this year.

“It was an amazing success,” says Graham. “Risk isn't all about not doing things. I think we were the epitome of taking risks but doing it in a very controlled and well managed way. We were quite strict and had lots of protocols and processes in place in Brighton.”

“We also haven't overlooked the fact that holding events online contributes to our sustainability footprint: fewer people are travelling; we’re publishing less paper – these are things we are very conscious of,” adds Graham.

Prior to the conference, Airmic undertook a  major survey of its members to establish their key concerns. High on the list are supply chain risk, ESG and cyber - particularly ransomware. They are also concerned about the future of the insurance market, its ability to cope with systemic risks, and what the how the market is changing in its response to that.

“Some of this very positive: insurers are becoming much more aware of and conscious of risks, which I don't think they necessarily were with the same intensely before. It’s driven some of our partners - big insurance and risks consultants - to join their businesses up better. Our members are saying that you can't manage risk in silos - that’s the complete opposite of what enterprise risk is all about. We're noticing some of the partners are starting to realign and reorganise as integrated entities, rather than being driven by silos, which I think is brilliant. The acceleration of the use of technology during the pandemic has also energised our members and our partners to speed up their own development so that they can keep up with the world that we now have.”

Another key focus to emerge from the pandemic is employee wellness and mental health.

“The joining up of insurers, brokers and consultants has led to some interesting things like employee benefits featuring more strongly in the general offering with insurance. Brokers and risks consultants are recognising that people are an incredibly important part of any organisation,” says Graham.

The year ahead

As we end the year with a further Government request to work from home, Virtual Airmic has sprung back into action.

“But we have to look ahead,” says Graham.

Airmic has several exciting ventures planned: it will hold its first island of Ireland Forum, and will hold its first Captives Forum in London on March23. It has several new educational initiatives on the horizon, and some collaborative projects with other institutes and associations.

“We're going to cooperate particularly in the areas of accountancy, audit, and with our very good friends in the world of business continuity and resilience,” says Graham.

“There will be a strong on cyber risk and insurance and supply chain. We also want to go back to the roots of some great education on insurance policies and wordings, and we're very keen to reignite the focus on claims. Claims has been neglected in the in the past, and we believe it should be there at the design stage of any insurance programme – and not seen as something considered when things so wrong.

“We've got better at listening in the past two years, better at taking opinions from people rather than saying how we think things should be. We aim to emerge from these challenging times as stronger,” she says.