Risk managers bemoan lack of insurer innovation

Lack of innovation is the biggest complaint that risk managers have about the insurance industry, according to the latest annual poll of Airmic members.

The corporate insurance buyers identified reputation and supply chain risks as the top risks for which their businesses did not take out cover.

Reputation risk was identified as a top-five priority by more than half of the 110 risk managers polled, coming second only to catastrophe events.

But only 11% of those who worried about the reputation of their company bought insurance to cover it. The reasons for not doing so were overwhelmingly lack of availability (59%) and inadequate coverage (37%).

The majority of those who saw supply chain risk as a priority also decided not to insure it, with high cost of insurance (40%) and inadequate coverage (40%) the main reasons.

Airmic chief executive John Hurrell said: “I understand the difficulties that insurers face, but in my view underwriters need to be bolder. There’s a huge gap there for underwriters to fill if they can get it right.”

The survey also found that one-fifth of risk managers were most worried about how and whether claims are paid by insurers.

Some 29% of those who took part in the survey reported having had a claim turned down, declined, delayed or reduced in the past three years. The main reason was the use of basis clauses or conditions precedent by insurers (31%), followed by late notification (28%) or the inability to provide information requested by the insurers (25%).