View from the top: The new watchword

The confluence of being at the bottom of both cycles presents specific challenges to our industry at a time when we are also having to deal with increased scrutiny from regulators as we move to a better standard of financial strength assessment under Solvency II.

It would be easy to be distracted. Concentrating on our businesses rather than our clients' needs would be understandable if a little short-sighted.

We should not forget that, as an industry, we are well placed to recycle our experience and provide services that help our customers reduce risks and mitigate losses. In other words help them become more efficient, which clearly has wider socio-economic benefits. We are not, after all, simply about offering a risk transfer mechanism.

Our own research with Association of Insurance and Risk Managers' members suggests a demand for loss control consultancy services. Traditionally, the industry has been good at delivering guidance on managing property risks but companies are now seeking a wider range of tools and services from their insurance providers — for example, driver profiling to reduce accident risks for motor fleets.

There appear to be two drivers behind the demand. The first, to cut cost within businesses. The second is the concern that insurance costs may be set to rise — the fabled hardening market. This may drive businesses to seek to retain more risk. In so doing there will be a greater scrutiny of corporate risks and emphasis on better risk management.

If companies can help customers become more efficient by improving the quality of the risks they face it will help drive the view that the insurance industry can be a catalyst for effective change in the economy.

Offering valued loss control consultancy services will become an important differentiator within our industry which will help those who do it well retain relationships and generate new business.

Lex Baugh
CEO, Chartis Insurance UK

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