2 May 2024news

AstraZeneca adopts business resilience insurance policy

Pharmaceutical company AstraZeneca has agreed a five-year business resilience insurance policy with its captive insurance company which will give it protection against "connected risks".

The company said the policy is supported by three of the world’s largest reinsurers.

In what it said was a re/insurance industry first, the policy offers cover against supply chain disruption, reputational damage and product withdrawal.

The policy was announced to a select group of risk managers via the Corporate Working Group of Russell Group Limited, a data and analytics firm.

"Initially, the connected risk policy offers risk financing against a range of major events, with minimal exclusions, but it is anticipated that as the exposures become better understood, with improvements in data and analytics being offered by firms such as Russell, there will be a major industry shift to innovative risk transfer structures of this type," AstraZeneca said.

Kevin Steed, head of group insurance at AstraZeneca, said: “I was delighted to advise on the progress and success of the AstraZeneca Group Insurance team in implementing our exciting new Business Resilience Insurance Policy within the AstraZeneca captive and reinsurance framework.  The level of dialogue between the various risk managers on the Russell Working Group call was phenomenal, clearly outlining the common interest that insurance products need to be relevant, not just now, but also for the future.

"Our risk landscape is constantly evolving, and we need to adapt and move on. Sharing the learning and experiences should help all of us in our roles, and position corporate insurance as a headliner for innovation.”

David Broughton, chair of the Working Group and head of Insurable Risk at Centrica explains: ‘We need to move away from peril-based traditional insurance products to considering risk from an outcome-based perspective. We are delighted that one of our Working Group members has made such a bold, forward-looking leap into what we expect will be a new era of outcome-based solutions to tackle connected risk.’

Suki Basi, managing director of Russell Group, said: “It was a real privilege to witness history in the making of a new era for insurance with this tangible connected risk solution. The insurance market has been perceived as being resistant to change but here is an example of the market leaders displaying true innovation.

"One of the biggest wins of this connected risk policy is that it responds to outcomes, so it is a major step in the right direction.”

The Russell Working Group was originally formed in 2018 to focus on ‘Connected Risk’ and to explore how data and analytics orientated solutions could help both corporate risk managers and (re)insurers design risk solutions more suited to today’s connected trading environment. The group has over 30 members, including 20 of the FTSE100, representing companies of various sizes across industry and, encompassing both insurance and risk professionals.