Airmic: Conference Speakers: Mike Hammond, Mark Well, Mike McGavick and Philipe Rocard

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This year’s Airmic conference, held in Birmingham from 16 to 18 June, will see a record number of attendees descend on the UK’s second city. We caught up with some of the speakers to find out a bit more about them, what they thought this year’s talking points would be and what risk management of the future looks like.

Mike Hammond, chief executive, Lockton

mike-hammondWhat are the main issues the market will be talking about?
Insurers and reinsurers are obviously looking at the rating and regulatory environment and the continuing influx of capital and new entrants across the globe. Also, the emerging risk environment continues to strain boardrooms, and the response from the insurance market seems sluggish and pedantic. Our industry needs to respond faster and with greater urgency to the risks associated with intangible assets, first and third-party cyber risks and supply chain issues.

How has regulation changed over the past year and what do you expect for the future?
We are still waiting to see how the changes at the regulators will impact the way business is conducted at the ‘Airmic-type client’ level. There is no doubt smaller brokers see the regulatory environment as a burden. However, we cannot escape the fact that regulation is here to stay and will inevitably continue to challenge businesses to operate legally, fairly and efficiently. That is a good thing –
as long as it does not stifle investment and innovation.

How can insurers and risk managers work together more effectively?
Not forgetting brokers too – they all must communicate, innovate and get better at building solutions to emerging risks, rather than churning existing business and chasing price down.

What does the future look like for risk management?
Exciting, intimidating and challenging, but ultimately rewarding for those that ‘take the road less travelled’ (thank you, Robert Frost).

Mark Weil, CEO, Marsh UK & Ireland

[image3]What are the main issues the market will be talking about?
There will be a lot of talk about emerging risks in areas where major incidents have caught people’s attention – things like cyber attacks causing intellectual property and data loss; bribery and corruption charges with public liability sanctions; and business interruption as a result of supply chain failure. We see these kinds of crisis events as a real challenge for the insurance sector and risk managers, given how quickly the reputational damage and financial stress can spiral out of control. We need to raise our game to be relevant to these kinds of challenges. I’d also expect continuing scrutiny over contract certainty and other issues affecting client confidence.

What are the challenges facing the risk management market this year?
Cyber risk and balancing the threats and opportunities associated with economic recovery rank among the major challenges facing the risk management community this year. Every business, no matter how large or small, is part of a complex, inter-connected global network of suppliers and customers, and no firm is immune to cyber and counter-party risk. On the latter, we see base rate rises coming that will put a lot of strain on firms and add to the non-payment risk for our clients.

What do you see as the main benefits of the conference?
The insurance industry often feels quite introverted, happy talking with itself about itself. Airmic is an event first and foremost for our clients, where we can listen to their views and priorities. It’s also a chance to push my 5km run time and break the elusive 20-minute barrier.

How can insurers and risk managers work together more effectively?
By helping clients lock in on their rate reductions. At the moment many clients are seeing premiums come down, which is good, but often this is more as a result of market competition than because of reduced risk from the client. To avoid rates going back up in response to market conditions, clients need to work on risk reduction. Our claims data shows big skews in underlying client riskiness in terms of frequency and severity across multiple classes, which points to much work still needing to be done.

What does the future look like for risk management?
Data and analytics will play an increasingly important role in helping firms make more informed risk-financing decisions. I look to the banking industry as one that has [abundant data and which has] been tested to the limits by the recent crisis. There I see risk as a critical standalone discipline from the board risk director down, with a lot of governance, analytical tools and broad-based solutions to events. I don’t think other industries will end up as heavily invested, but it points the way to how risk management will evolve as others come to see it as a critical discipline for their business.

Mike McGavick, CEO, XL Group

[image2]What are the main issues the market will be talking about?
The need to drive innovation is at the top of everyone’s agenda. For companies and risk managers this is particularly true around emerging cyber and data risks. This year we have already seen a massive data breach with some 145 million user records compromised, so we know that how we capture, store, understand and secure data will be a hot topic.

What are the challenges facing the risk management market this year?
Company boards are increasingly concerned with their own risk management and at the same time are searching for growth.

How has regulation changed over the past year and what do you expect for the future?
The main focus right now is the development and implementation of the various regional standards. These are complex and fundamental issues to get right. But, in the well-intentioned effort to ‘get it right’, there are outcomes we have to be watchful for – including whether each new regulatory system creates additional and conflicting regulation detrimental to the sector, rather than simple and complementary layers of regulation.

What do you see as the main benefits of the conference?
There is an obvious benefit to gathering so much industry talent in one place – the conversations and connections reinforce us and push us forward.

How can insurers and risk managers work together more effectively?
Risk managers who involve their insurer from the get-go and also continue the dialogue through the underwriting process and beyond will be more successful.

What does the future look like for risk management?
We will continue to see the need to manage new and compounding risks ever more quickly. We are just beginning to understand what that means for risk management.

Philippe Rocard, CEO, Axa Corporate Solutions

rocard phillipe axaWhat are the main issues the market will be talking about?
Contract certainty is one of the topics the market is concerned about and will, therefore, be on the top of the agenda. Today it is not sufficient to issue a policy in a correct time frame – you have to be sure it provides the best covers and that all parties involved have the same understanding of the policy intent. Compliance and pricing trends will surely also be in all participants’ minds.

What are the challenges facing the risk management market this year?
Challenges include the ability to provide a holistic view of the risks to the board and to set up an action plan for the prioritised risks; use of captives; optimisation of insurance programs by keeping the right balance between inner costs and risk transfer; non-disclosure and breach of warranty; contract certainty, in particular with major claims; the need for insurance solutions to cover specific exposures and/or non-traditional risks such as cyber, reputation and political and the necessity to meet the increased need for compliance.

What are the main benefits you see of the conference?
As CEO of an organisation which services global clients, it is important both to understand global concerns of risk managers and to have a first-hand understanding of individual and local concerns. Attending risk management conferences, such as Airmic, provides me with the opportunity to build both a global and local picture of the way the community is thinking, what keeps them awake at night, and highlights areas where we insurers can assist.

How can insurers and risk managers work together more effectively?
It is a question of spending more time face-to-face [with each other] to ensure optimum cover/value. [It is also essential to ensure] contract certainty via clearer processes and requirements regarding disclosure, greater mutual understanding of policy intent, agreement of claims processes, understanding specifics of individual risks, less duplication of effort, clearer understanding of client needs and innovation on a case-by-case approach.

What does the future look like for risk management?
We live and work in a world which is getting increasingly international, with fast-changing regulations, leaner processes and greater use of tech solutions, especially in the risk consultancy field. This means huge evolutions in the insurance offer are needed, such as development of products combining traditional insurance and alternative risk transfer solutions, focus on innovation in services, investment in research and development and sharing knowledge to raise awareness.

This article was published in the 12 June edition of Post magazine.

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