A leading risk management expert has called on the insurance industry to rethink the premise of risk transfer, saying there may be a more strategic way to protect consumers.
“Traditionally, as an industry, we have gone to our clients with the answer to their risk being insurance – basically, transfer your risk,” said Anthony Black, senior risk solution consultant at Ansvar Insurance. “But insurance must go beyond risk transfer.”
The specialist insurer focuses on organisations operating under the umbrellas of faith, care, education, heritage or community – sectors which, Black says, could seriously benefit from greater risk awareness and improved contingency planning.
“We can’t afford our clients to be operating in the space of just hitting the panic button,” he told attendees during the first leg of Ansvar’s ongoing national broker education forum. “We need to support them to go beyond that.”
Instead of connecting clients with the best possible insurance for their situation, Black said brokers should be stepping more heavily into the role of risk management.
“I know that as a sector we are considering it and we’re looking at it, but by goodness it’s hard. How do we pitch this to our clients? How do we move them beyond the limbic system of thinking of governance and risk management, how do we move them on?”
Despite the challenges, Black said brokers were in an ideal position to guide clients towards greater risk awareness and a more holistic understanding of threats.
“You can use your advisory role to help your clients with their risk management,” he told brokers. “I think it’s really important for us that we start to define the risk universe of the sectors that we’re working with.”
Black also asked brokers to consider the conversations they were having with their clients around risk – were they solely addressing issues that were present right now or were they working to identify risks that are looming on the horizon?
He pointed to the annual World Economic Forum’s Global Risk Report, which identifies the key threats facing organisations over the next 10 years, as a useful starting point.
“The most common trends and threats are things like climate change, chronic disease, the cyber environment and demographic changes,” he said.
“Then you have things like extreme weather events, rapid social instability, cyberattacks and failure of governance – these are things across the world that are confronting us rapidly but are they conversations that we’re having?
“We need to think broadly about the risks that confront our sectors, are we giving enough consideration to what’s happening in the world as risks that could impact the organisations we work with?”