Looking back on 2020, and gearing up for 2021
Partnering with customers in times of Covid
Uncertainty of the Covid-19 pandemic continues to be challenging for our customers in the Asia Pacific region. With their large-scale operations, business continuity and short-term actions were top priority when the pandemic hit. In addition, customers had concerns relating to safeguarding operations, ensuring employees' well-being, mitigating supply chain disruptions, and managing cash and liquidity positions.
In understanding our customers' concerns, we looked at different ways to support them. Apart from providing clarity on coverage and supporting them beyond just risk transfer, we also focused on providing insights relevant to their business and operations. Initially, we supported some customers in helping them shut down their operations safely, now, insights are available to help them restart their operations safely to reduce potential losses and business disruptions arising from machinery breakdown and fires.
We see varying responses to the Covid pandemic including companies adapting their business models to meet changing consumer demands and companies using the pandemic as a catalyst to turn digital and be agile.
Proactively engaging with brokers becomes essential
For the industry, the pandemic has necessitated closer communications between brokers and insurers. We have made it a point to provide clear and consistent coverage and claims processing information, proactively explaining market reviews and our coverage to our broking partners. Additionally, our team has offered technical advice and virtual risk management solutions that could help businesses impacted by Covid-19. This is supplemented by knowledge sharing sessions to broking partners in the form of webinars, advisories and updates.
Understanding that funding is increasingly becoming a concern, we have developed a "virtual captives" solution. This is an efficient instrument to help customers optimize their self-insured retentions via pre- and post-funding features. With emergence of new companies and business models, insurers will need to be more agile and creative to address customers' changing needs.
Emerging trends observed
Companies are now more risk alert, and corporate risk managers have begun reviewing their risk registers to identify exposures that might have been overlooked or underestimated. Consequently, there is increased interest in risk transfer solutions for supply chain risks, climate change, as well as natural catastrophes. Parametric insurance, for instance, has proven to be an effective complement that fills the traditional insurance program gaps.
In addition, the pandemic has also accelerated the market hardening in parts of Asia. Optimization of self-insured retention is a growing consideration among businesses faced with increasing rates and uncertainties in the current environment.
Building agility for 2021
The constantly evolving Covid-19 landscape makes it challenging to predict how 2021 will pan out. One of the themes we expect to continue going in to 2021 is the engagement of our customers through virtual platforms. We have found virtual communications to be effective in increasing interactions with customers - our insights sharing webinars, for instance, has enabled us to connect with more people across the region. We also had record turnout for our virtual Client Advisory Panel (CAP) session.
The changing risk landscape and digitalized economy is also increasing the need for risk insights and innovative risk solutions. With emergence of new companies and business models, insurers will need to be more agile and creative to address customers' changing needs. Our Corporate Solutions strategy includes technology investments and a focus on corporate partnerships, which should position us strongly over the next few years to address both the challenges and opportunities that come with these changes.
From a sustainability perspective, in the short run, we anticipate that businesses coming out of the pandemic will need better support to get back to normal. A medium-term sustainability concern, on the other hand, relates to recognition of vulnerabilities. An example of this is the supply chain. Covid-19 disruptions to the supply chain and growing complexity in global supply chains are calling the need for companies to rethink their supply chain strategy. This is an area of focus for Swiss Re.
While we see a lot of uncertainty in the customer base, our focus on evolving with new customer models and risk and insurance needs will enable us to realize the benefits that will come from this difficult period for our customers and the Industry.