The Big Question: How should insurers be approaching risk engineering in a time of changing risks?

The growing complexity of the risks facing business across the world have put additional pressure on insurers to create solutions in an era where changing operating models and the rapid implementation of technology has created new challenges.

From the impact of climate change, the  growing use of technology, regulatory change and the continued pressure on the global supply chain and geopolitical risks, the challenges facing business are many and are varied. Business leaders and risk managers are looking to their brokers and underwriters for advice, data and solutions at a time when price remains important when it comes to the buying decisions.

The growing availability of data has created a demand for greater levels of information at the point  of underwriting and it has put further emphasis on the need for companies to have robust risk management systems in place and the ability to clearly evidence them. However, insurers are increasingly adopting a focus on resilience and risk prevention and it has led to an increase in the need for risk engineering, and insurers have been keen to look at how they can support clients.

Ian Summers, Global Business Leader, AdvantageGo.

Andy Jones, Risk Consulting Director, RSA says in changing times there is much that insurers can do to support clients to better engineer their risks.

“Risk engineering has evolved significantly since I first cut my teeth in risk management,” he explains. “Changing technology, business practices and shifting risk landscapes have all played their part.”

“Change is constant in the risk space. As we transition from the peak of the hard market created during the Covid years, risk managers have had to adapt their insurance strategies. It’s important to capitalise on new cost-saving opportunities and focus on comprehensive risk mitigation in this new operating environment.”

“To accommodate this need insurers are developing improved risk engineering capabilities. They’re becoming more data-driven, proactive, and collaborative. We’re also seeing a greater focus on emerging risks including cyber threats and sustainability challenges.”

“Some insurers are also turning to advanced technologies and analytical tools to provide enhanced risk management solutions, but is this enough? How do clients choose between one insurer and another? Differentiation is key.”

Jones adds that a personal touch is becoming an ever-greater attraction for clients who are faced with fast evolving and complex risks.

“Insurers offering a personalised, risk consultancy service should be at the heart of every large-scale insurance opportunity,” he explains. “It’s arguably the key differentiator between insurer offerings today.”

“Every client has unique risks based on their industry, operations, and geographic locations. By taking a personal approach through deep-dive consultative support, an insurer can tailor a risk solution to meet the specific demands and circumstances of even the most challenging of insurance requests. The aim of this approach is to ensure the client receives strategic support that addresses their individual vulnerabilities.”

“Building a personal, consultative relationship is key. It allows the insurer to gain a deep understanding of their client’s business operations, risk tolerance, and objectives. This means better advice and more personalised recommendations that align with the client’s goals. Our risk consultancy proposition, designed for large-scale insurance projects, is underpinned by this approach and works to great effect.”

Jones says personal interaction and the sharing of experiences between the insurer and insured creates confidence.

“Clients are far more likely to trust the recommendations and expertise of an insurer who takes the time to understand their business and demonstrates a genuine commitment to their success,” he explains. “This depth of relationship is essential for building long-term partnerships and retaining clients over time. It’s a real differentiator. If fostered well, everyone’s a winner!”

“This added dimension found in a 1:1 consultancy model, used alongside large books of business, allows a thorough assessment of the client’s operations, identifying potential risks and pinpointing vulnerabilities. By engaging directly with the client and conducting site visits or interviews, insurers using this approach can uncover hidden risks that may not be apparent through standard risk assessment methods. This more personal approach helps clients mitigate risks before they escalate into costly incidents. Technology is a supporting factor but without a deep dive, personal assessment in large-scale or complex situations, risk vulnerabilities can be missed.”

He added he believes this forensic risk analysis allows insurers to work collaboratively with clients and their brokers to develop proactive risk management strategies. Instead of simply reacting to incidents as they occur, the insurer can help clients implement preventive measures and contingency plans to minimise the likelihood and severity of losses.

“I’m a people person and recognise the value of personal interaction and the sharing of expertise face-to-face. By offering personalised, risk engineering consultancy services, we as the insurer demonstrate a commitment to adding value beyond insurance coverage.”

“Clients appreciate us going the extra mile to support their risk management efforts and help them achieve their business objectives. A value-added service like this helps differentiate one insurer from another in a competitive market and in our experience enhances client loyalty.”

“A personalised solution may not be necessary, however. Access to tried and tested methods may be a better option. Whatever your situation, a best-in-class risk engineering team will advise you and your broker accordingly.’’

Jones concludes: “To sum up, taking a personal, consultative approach to risk engineering allows insurers to provide individual solutions where appropriate, build trust with clients, identify risks more effectively, and deliver value-added services that support client success. By investing in personalised interactions and customised risk management strategies, insurers can strengthen client relationships and differentiate themselves in the marketplace.”