Collaborative solutions to develop ‘a risk sharing model’ – Fair4AllFinance

There needs to be a collaborative effort involving regulation, financial service providers and the government to address challenges in allocating funds for vulnerable consumers.

That was according to Sacha Romanovitch, chief executive of Fair4AllFinance, who explained the “it is importance of working together, especially in cases where commercial organisations may find it challenging to allocate funds due to risks and shareholder accountability”.

Speaking at this week’s (27 February 2024) ABI Conference, Romanovitch pointed out an increase in the utilisation of the The Great Risk Transfer campaign, which was introduced in January 2022, within the insurance industry.

The campaign encourages the transfer of risk in, where one party pays another to take responsibility for mitigating specific losses that may or may not occur.

Romanovitch explained that her organisation were in the “initial stages of collaboration with the ABI on exploring ways to develop a risk-sharing model”.

This approach aims to enable insurers to leverage their expertise in efficiently providing and establishing insurance, including distribution channels.

Make a difference

However, sharing risks introduces a layer of risk that could potentially be shouldered by the government or a regulator.

“I believe that conducting thorough research and gathering evidence to understand customer needs is [crucial],” said Romanovitch.

She explained this would involve identifying layers that can be sustainably addressed by organisations.

After determining what cannot be handled in this manner, the next step would be to test and prove strategies that would work for those specific challenges.

“It gives us a real opportunity to make a difference,” she said