Like in other markets across the world, experts have identified the need to up the game of insurance for better service delivery and to avoid losing relevance amongst the insuring public.
To achieve this is the need to come together as a pool to be able to underwrite big ticket risks, emerging risks and also assist individual households and the economy at large.
Pat Utomi, founder and chief executive officer, Centre for Values in Leadership who spoke at the Chartered Insurance Institute of Nigeria (CIIN) education Conference in Lagos said using pooled risk would help insurers managing growing risk uncertainties and contribute to national transformation.
Gamaliel Onosode, at the same forum emphasised need for the insurance industry to create more value as necessary in building confidence among the insuring public.
Onosode noted that by creating value, insurers can conveniently convince the general public that insurance is a fair price to pay for peace of mind for the unexpected eventualities.
“If the operators can realise the need to sustain the confidence of the public, then insurance industry will prosper and the nation will also proper.”
On a similar vein, insurers who took part in a panel debate at the close of Commercial Risk Europe’s Global Risk Frontiers forum in London recently conceded that the level of insurable risk is falling.
In response to questions about how this trend could be halted or even reversed, the insurers called for increased discussions and cooperation between risk transfer partners.
Risk managers on the panel agreed with the insurer representatives that the market also needs to exploit the use of bigger and better data, particularly in order to service complex and emerging risks.
One leading insurance executive boldly urged insurers to increase collaboration via consortiums and risk pools to help maintain relevance and tackle emerging and difficult risks more effectively.
Nigel Bamber, UK country manager and regional manager UK and Ireland at XL Group, pointed out to the gathered audience of risk professionals that today less of the top ranked business risks are insurable than they were in the past.
He noted that Aon’s annual Global Risk Report now finds non-insurable risks, such as economic slowdown, regulatory changes and increased competition, dominate the corporate risk agenda.
This has changed from 2007 when insurable risks such as business interruption, third party liability and supply chain failure rated most highly.
Bamber stressed that the insurance industry remains ‘very strong’ in core property and casualty lines. But he conceded that it has ‘clearly become less relevant’ in the overall effort to manage business risks.
“You might argue that it is not our job to protect you against such risks so perhaps we need to look at how we operate against your insurable risks. But I think in this latter part, again, we have become slightly less relevant,” he conceded to the risk manager delegates.
“I think there are areas like emerging risk, cyber insurance for example, where we have to provide a better product for you to buy-that is a reality,” he added.
“If you look at the average corporate risk map and say what percentage in 2013 is insurable compared with 2003, the answer is very much less,” he said.
“If you look at assets now on the balance sheet they are all around things like technology, intellectual property, brand and reputation; it is not around how many factories you have and the value of your buildings. So again, as a value of corporate assets, the insurance industry is covering less,” he added.
Insurance executives who took part in the Future Role of Risk Transfer in Enterprise Wide Risk Management panel debate all agreed that their industry must work harder to maintain relevance in today’s economy.