Partnering with customers in times of COVID-19 and a hardening market
The uncertainty of the COVID-19 pandemic and effects of the second wave continue to challenge our business partners across Europe, the Middle East and Africa. I have heard many customers voice concerns about safeguarding operations, ensuring employees' well-being, mitigating supply chain disruptions, and managing cash and liquidity positions.
In addition, we're experiencing a hardening insurance market where terms are tightening and prices are going up. This correction was overdue, given a very long soft cycle with eroding rates and increasing loss costs – both due to heavy natcat seasons and significant man-made losses – and it's reinforced by continuously low interest rates. Yet this development doesn't make life any easier for risk managers looking to protect their businesses amidst a world in crisis.
Proactively engaging with brokers and customers is essential
For the industry, the pandemic and the challenging market environment have necessitated closer communications between customers, brokers and insurers. We have made it a point to provide clear and consistent coverage and claims processing information.
As we strive to offer support beyond just risk transfer, we focus on providing insights relevant to businesses and operations. Our team shared technical advice and provided virtual risk management solutions to help businesses impacted by COVID-19. This was and still is supplemented by knowledge sharing sessions in the form of webinars, advisories and updates.
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 gaps in traditional insurance programmes.
Understanding that funding is increasingly becoming a concern as well, we have developed a virtual captive solution. A virtual captive is an efficient instrument that helps customers optimise their self-insured retentions via pre- and post-funding features. It's a very good example of how we as insurers can be innovative and creative in how we address our customers' changing needs.
Building agility for 2021
The constantly evolving COVID-19 landscape makes it challenging to predict how 2021 will pan out. Yet one theme we expect to continue into 2021 is virtual engagement with customers and broker partners – something I have come to enjoy more and more.
The changing risk landscape and digitalised economy mean a continued need for risk insights and innovative risk solutions.
Our Swiss Re 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 the changing risk landscape – ultimately for the benefit of you, our valued customers and broker partners.
Until then, stay well.