The perception that the insurance industry cycles between hard and soft markets as it has historically is no longer accurate, according to Carsten Scheffel, CEO Regional Unit London, Allianz Global Corporate & Specialty.
He says that as the market becomes more competitive, the cycles have disappeared.
“What you’ll see now is adjustments in lines of business where things go bad – but it won’t be across all lines,” he said. “Events such as an active hurricane season will lead to very specific adjustments.”
One type of event making the headlines at present is cyber-crime, as highlighted in a string of recent news stories. Scheffel expects the topic to be high on the agenda at this year’s AIRMIC conference in Birmingham.
“I think cyber will definitely be on the minds of a lot of risk managers involved. A lot of insureds didn’t plan on purchasing cyber coverage – it’s one of those new and emerging risks that has risen very quickly,” he said.
“The key component for us as an insurance company is we can’t protect them from everything but we can certainly help them, for example, with preventing the reputational damage that can result from a cyber-attack.”
Allianz is one of the few carriers to offer a comprehensive cyber policy, rather than offering parts of the coverage via property and liability policies.
This, Scheffel says, is an example of the industry’s growing ability to respond quickly to customers’ needs. Other examples include non-damage business interruption and reputational risk.
This is likely a result of a major improvement Scheffel has observed in the lines of communication between buyers and insurers.
“In the UK in particular there is a shift to dialogue with the companies and the broker in a three way partnership,” he said. “It is much stronger than it was three years ago. That’s a major shift, not just with the underwriting side of the business but meeting the claims people, the risk consultants, the senior management of the company and getting a better understanding of the company’s philosophy and where it wants to go.”
“We contributed to that shift; we found historically that if we can get in front of the client with the broker and sell our proposition, the outcome is better.”
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Carsten Scheffel, AIRMIC, Allianz Global Corporate & Specialty, Europe