Risk Engineering: A key component of International Programs

• Mid-market companies and large corporates have tens, hundreds and sometimes thousands of locations throughout the world.
• One of the many challenges they face is managing and controlling local risks in a way that maximises the operations at their individual facilities while simultaneously delivering the best overall risk performance at group level.
• How international companies identify, manage, mitigate and transfer risk feeds directly into their ability to improve their corporate resilience, sustainability and success.

In this article we set out the benefits of combining an international insurance program with an associated risk engineering service framework.   

International programs provide insureds with consistent policy wording and coverage across all their international operations. They ensure there are standard claims handling protocols in place and enable insureds to centralise their decision making.

In addition, an international program with Swiss Re Corporate Solutions provides a single point of contact who gives risk managers easy and efficient access to all our experts, technical knowledge and support services.

Risk engineering supports customers in identifying and quantifying their risks. It assesses both needed and existing risk mitigation strategies and sets the most cost-efficient priorities for a corporate’s loss prevention budgets. Risk engineers enable corporate executives to translate their risk control decisions into tangible local solutions.

When structured as part of an overall insurance proposition, an international program combined with a risk engineering services will deliver powerful and valuable benefits to insureds.

Brandl adds: “When international programs and risk engineering go hand in hand, risk and insurance managers can truly take control of their exposures. The most tangible services customers receive as part of their insurance are risk engineering and claims management solutions. It’s not just about checking the numbers and paying out, but about proactively helping with loss mitigation and loss prevention. We refer to the combination of our services as a smart circle, which allows customers, brokers and insurers to enjoy a partnership that enables effective, centralised and data-based decision making.”

Insurance cover and risk management must be effective at a local level, but international companies also need to understand and control their risk and insurance at an enterprise level. In an increasingly connected risk landscape, losses at one facility can create significant knock-on impacts on sister plants, suppliers and customers.

Identifying and quantifying the interdependencies that exist within international businesses is challenging, but less so for those with international programs. These programs give insureds access to insights for each location and create detailed oversight at an enterprise level. Some corporates are starting to work hand-in-hand with peers and critical suppliers to gain full transparency about their supply chain.

Tina Baacke, Global Head International Programs & Risk Engineering Services, comments: “The risk managers don’t need to call 20 different countries to get risk reports, only to find they all have different criteria. They have a single overview of their risks. Via our PULSE portal, risk managers can oversee all of their serviced locations, benchmark their own risks with industry peers and share risk updates.”

Access to such centralised and globally consistent risk data enables risk managers to better understand the interdependencies between locations and where the individual vulnerabilities lie. This empowers them to deal with their exposures more strategically.

In the event of a loss, it can be difficult for some companies to access immediate and comprehensive insurance data. If they have a patchwork of local policies in place, risk managers at group level often struggle to get local policy documentation quickly and understand the exact level of cover in place.

Insureds with international programs won’t have the same struggles in accessing local policies and risk data. Swiss Re Corporate Solutions gives customers access to its PULSE portal, which enables them to monitor and manage their insurance program from one secure place. It lets them review their policy, track premium payments, submit loss notifications, monitor claims and track the progress of risk improvement measures.

In addition, the granular, scientific and detailed level of combined risk data makes it possible to accurately quantify the return on investment that companies receive on the capital outlay for implementing risk engineering measures.

Baacke explains: “The beauty is, you’re able to start demonstrating return on investment. Let’s face it, some of the risk prevention measures that engineers are recommending are very cost intensive. But we enable our customers to quantify how much of an improved risk these investments result in. So that’s not just a view of now and today, but the next cycle, the next year, and the next 18 months or even longer.”  

When companies proactively combine an international program with a comprehensive risk engineering strategy, it fosters a strong partnership between the insurer, the insured and the broker. Risk Engineers spend significant time with local and corporate decision makers, working towards a common goal and improving the performance of the insured risk.

Over the course of a long-term relationship, insureds will become increasingly resilient. They’ll be less likely to suffer losses from risks they’ve identified and mitigated. They’ll also be able to better deal with those that come from out of the blue, due to the enhanced level of readiness that a focus on risk engineering creates.

Where losses do occur, international programs make it easier for risk managers to take quick, centralised decisions that expedite the claims process, making it possible to return to pre-loss levels of production and performance more quickly.

Baacke continues: “ If you have an international program, it’s much easier to get all this information together and have a centralised discussion, rather than trying to get a picture from 10 different plant managers who all have different views.”

The benefits of combining an international program with risk engineering services have the potential to transform companies’ resilience, but insureds need to commit to taking an active role in the relationship if they want it to be as productive and beneficial as possible.

Brandl says: “Risk engineering is key to solving loss prevention challenges. Quantifying the total costs of risk is no longer a far-away future vision, which means risk and insurance managers can tackle threats head-on.

Joining these two views (top-down and bottom-up) together, enables organisations to harness the full potential of risk engineering, unlock unprecedented digital platform capabilities and to start thinking about risks holistically through the lens of multiple data sources that are organised coherently and efficiently against their assets and exposures and those of third parties."

He adds: “Renewals are no longer a deadline that corporates are desperately working against, but a value-adding, continuous circle. You plan, you monitor, you control, you adjust, and then you renew again.”