From: Commercial Risk
Although the commercial insurance market needed a correction, little recognition of risk management efforts or differentiation between long-term buying partners and opportunistic peers during recent hardening, has eroded trust in insurers, according to risk managers taking part in a panel discussion during Commercial Risk’s Global Programmes conference this week.
Alexander Mahnke, CEO of insurance at Siemens and chairman of German risk manager association GVNW, acknowledged that insurers haven’t made money from corporate insurance for quite some time and that pricing needed to rebalance in traditional lines.
“We want our insurers to earn money with the business they do with us. Doing this in an unsustainable way, not making profit over a long period of time, is not something that is good for the market, or insurers, and because we believe in long-term relationships, it is not good for us either, because it creates erratic behaviour,” he said during the virtual event, being held on 14-16 September and sponsored by Allianz, AIG, AXA XL, Axco, Globex Underwriting Services, Marsh, TMF Group, Willis Towers Watson and Zurich.
And Mr Mahnke noted that underwriting was erratic in the last two renewal rounds in Germany. He said this has eroded trust, and explained that 80% of GVNW members rated the reputation of corporate insurers in Germany as “very bad” in a poll this February.
Mr Mahnke pointed to cyber as a problem line. “Just a couple of years back, the same insurers that now mourn their losses in cyber and withdraw capacity, were the first in line telling us and our CFOs that cyber standalone is something we really have to look at. And some went as far as to say that if you don’t buy cyber you are halfway to a D&O claim,” he said during the event, supported by risk management associations Airmic, Belrim, Ferma, GVNW, Narim, Parima and Rims.