Risk managers have highlighted extreme and unexplained changes to rates and terms as a particular area of concern, in a survey of the industry conducted by Airmic, the trade association for risk and insurance professionals.
Airmic found risk managers want clearer communication from their insurance partners, and are increasingly interested in looking at captives and other alternative risk transfer options.
Two thirds of respondents said they would explore use of alternative risk transfer, including captives, parametric triggers and capital markets, with exactly half of the respondents indicating their organisation already operates one or more captives.
Risk managers were asked about recent and upcoming insurance renewals and specifically on directors’ and officers’ liability (D&O), which has seen some of the most dramatic changes in rates since insurance prices began to turn. Around 60 of Airmic’s members responded to the survey.
Some 66.7 percent of respondents highlighted concerns about poor and late communication from insurance partners, up from 42.6 percent last year, Airmic said.
Airmic said respondents had also expressed a desire for change in the renewals process in the future. Nearly three quarters of respondents (73.3 percent) said they would seek to begin the renewals process earlier, while 70 percent wanted to provide more data and information to insurance partners.
Respondents were also concerned about rate rises, with a fifth of respondents saying they had experienced a rate increase of more than 400 percent. A majority experienced D&O rises of at least 50 percent, and almost 30 percent said prices had doubled.
John Ludlow, chief executive officer at Airmic, said: “Hard won trusted relationships are clearly under strain. We must work better together to share relevant data with insurers to gain recognition for good risk management. Exposures and vulnerabilities poorly managed will be priced harshly but brokers and insurers should seek out well managed risks and price them beneficially to be respected as balanced and fair.”
Airmic, John Ludlow