Airmic warns insurers over ill-judged response to pandemic

Organisations have been caught off-guard by the scale and velocity of COVID-19, and insurers find themselves at risk of "flight to alternative risk transfer", according to a study published today by Airmic with QBE, Control Risks, KPMG, Willis Towers Watson and AIG.

On the plus side, risk professionals are receiving more board time than ever before as the pandemic disruption erodes internal organisational barriers. As Airmic's Julia Graham points out in the current issue of CIR Magazine, this represents a unique opportunity for risk professionals to demonstrate the strategic value of their work to their organisations.

The study was produced to help the industry navigate five key risk megatrend areas in the context of the global pandemic: cyber and technology; climate and environment; trust and reputation; geopolitics and populism; and governance, laws and regulation. It shows that while most businesses had pandemic on their risk registers, the response plans were designed to cope with a localised disease rather than a global pandemic. Few had taken into account the speed and extent to which lockdowns were imposed, and in particular the near total ceasing of international travel.

“The report clearly shows that risk professionals who can combine agility with effective leadership will respond most effectively to the challenges of returning to business as we emerge from the lockdown,” comments Julia Graham, Airmic’s deputy CEO and technical director. “Risk professionals have been rising up the corporate ladder for some time, and now is a vital period for seizing opportunities. It is the time to innovate, not retreat – both for organisations and individuals.”

In insurance, even before the pandemic, a hardening market meant that a lack of adequate insurance cover at an affordable premium was emerging as a risk in itself.

Airmic warns that “an ill-judged response to the pandemic” could trigger a flight to alternative transfer options, including captives. The association urges insurers, brokers and insurance buyers to work together openly and constructively, particularly during the COVID-19 crisis.

Airmic's study was conducted through an in-depth survey of members and qualitative research.

    Share Story:

Recent Stories

Your people and the pandemic: Are you doing enough?
Employee health, well-being and security have always been a vital part of risk management, and as organisations seek ways to ensure a smooth, successful and sustainable return to operations amid the evolving environment, careful consideration has to be given to all these areas, and quickly. Published August 2020

Responding to COVID-19: A safe and secure return to work
Learn more from the experts that worked on the recovery of the Diamond Princess. Published July 2020