But, ‘appetite’ can mean different things to different insurers and brokers, meaning that communications need to continue to be clearer than ever

By Editor Katie Scott

Post-pandemic, there is a renewed demand for insurers to have an internal spring clean and freshly pinpoint their risk appetite and areas of interest for brokers – especially following the murky confusion that arose following the onset of Covid-linked business interruption (BI) claims.

Katie Scott_bw_path

Katie Scott

For example, speaking on the topic of etrading during an Insurance Times webinar in February 2022, The Clear Group’s non-executive director Ashwin Mistry emphasised that brokers need to “genuinely understand where insurers’ true risk appetite is” in order to mitigate etrading referral delays exacerbated by the Covid-19 pandemic.

He told online attendees that insurers’ “changed” risk appetites must be clearly conveyed to brokers if their customers’ queries are to “be channelled correctly”.

Answering broker demand

The good news is that insurers appear to be listening to this feedback, which has also been cited in Insurance Times’ recent Five Star Rating Reports.

Lee Mooney, managing director for commercial lines, UK and international at RSA, told me that the insurer is looking “to nail” its risk appetite definition for brokers and “be very specific about what [risks] we want [to insure] going forward”.

He said: “We have to answer that appetite question. Unless we can tell our customers who we are and what we want, then it’s not a very attractive shop window is it?”

Mooney explained that to engage with RSA, brokers will need to exude certain “principles”.

These include placing “risk management at the core” of brokers’ business operations and having “a very, very balanced risk irrespective of what it looks like, risk control features, the culture and ethos of risk management and wanting to partner”.

In terms of SME risks, meanwhile, RSA is looking “to be very trade specific”, Mooney added.

Another insurer seeking to be more upfront about its risk appetite is Aviva.

Its chief distribution officer Gareth Hemming told me earlier this month that Aviva plans “to be really clear on what we do want to write” because the insurer is “hungry for growth in particular areas”.

He continued: “Big insurance companies are very good at telling people what they don’t want to do. One of the bits of feedback that we’ve had is ‘tell us what you do want to do’.

“So, we will be very proactive - and this is where coming back [to] the office has helped as well. You [can] go and spend time with brokers, [have] good discussions with them and be really clear on our appetite.

“We are hungry for growth in particular areas. We need to be much better at articulating where those [areas] are, where we’re competitive and where we can help brokers retain and win clients.”

Aviva’s UKGI chief executive for the UK and Ireland Adam Winslow agreed that Aviva needs to do a “really good job of explaining what we want, where we’ve got skills and capabilities [and] where we’ve got appetite”.

He cited the insurer’s global corporate and specialty (GCS) business as an example – this arm now writes risks that it didn’t five years ago.

Clearer communications

Although this acknowledgment from RSA and Aviva about clarifying their risk appetites will be welcomed by brokers, Mooney did also reference the challenge of appetite meaning different things to different brokers and insurers.

“It can mean price proximity, it can mean very specific trades, or it can be what type of engagement [brokers] need,” he explained.

Despite this potential communications pothole, the fact that insurers are looking to better engage with brokers on the risks they are best placed to insure can only be good news, as this can subsequently assist brokers in offering a comprehensive service to their own clients.

The industry’s post-pandemic drive towards greater transparency cannot just be end customer facing – improved clarity and conversations between brokers and insurers is a must as well, especially to avoid future BI-shaped cover confusions.