From Julian Kirkman-Page (Effisoft London) - All the pundits seem to agree that the current soft market is set to last for years. The insurance market is one of the best places for a return on investment at minimal risk, and there are huge venture funds waiting to pick up any slack. At the first sign of rates hardening after any major catastrophes, this capital will enter the market, once again driving down rates.
In such an environment, what should a risk manager be doing?
The insurance renewal process should by now be fairly streamlined. Certainly, leaving duty of disclosure aside albeit an increasingly important consideration, the amount and depth of data insurers require for renewal is not as onerous as it would be in a hard market when they can afford to dictate, and when it is that much harder to 'sell' your risk.
With the latest generation of RMIS (Risk Management Information Systems), implementing a system for gathering renewal data, and involving the people in your organisation at the coal-face of risk has never been easier. With the internet and intranet providing seamless access; systems being able to be designed as intuitive eliminating the need for training; and data consolidation being immediate for the risk manager, this should no longer be an exercise that takes up more than a few short weeks of the year at most.
Having created such a backbone of information however, (understanding the nature of your business, exposure information, and high level risk profiles), and with all the necessary parties connected, this provides a ready platform on which to improve, finesse and thereby expand the risk management programme throughout your organisation.
Time spent freed up from worrying about 'the renewal process' can now be usefully employed modelling and analysing what level of the 'correct' cover is required. In addition focus can be directed towards raising the profile of risk management within the corporate entity, building a sound risk management practice that imbeds itself into the nature of the organisation and finally leaves open the opportunity for the risk manager to have direct influence at board level, the ultimate nirvana AIRMIC has been dreaming of for its members for many years.
For risk managers who have their finger truly on the 'pulse', (and if they have not already done so), now is the time to take stock, and look closely at their job description. In most cases, the insurance piece should be a tick-box exercise, especially where brokers are employed, and they should now be raising the game to focus on those areas where actual management of risk is key.
Creating a risk information back-bone, getting risk management truly imbedded within the organisation and creating for the risk manager a key role in the future direction of the business is a legacy any risk manager can one day be proud of.