The subject of claims appears to have suddenly become the number one issue on European risk managers' radar screens.

Insurance companies and brokers need to take note and above all prepare for action.

Late last month, the Dutch risk management community gathered for its annual Nederlandse Associatie van Risk en Insurance Managers conference in Eindhoven along with some representatives of Belrim, the Belgian association.

The conference theme chosen was "Fairytale or Reality" which questioned the service provided by brokers and insurers of large corporate risks.

"We live in an environment of reality, although a lot of companies, managers and service providers tell fairytales," said Hans Gorree, current chairman of NARIM, Rotterdam-based corporate and risk manager at construction company Koninklije Volker Wessels Stevin N.V. and vice president of the Brussels-based Federation of European Risk Management Associations.

"We get glossy brochures and fantastic presentations, but when we go home to our companies, what can we do with the presentation in the reality of business today?" he asked.

"Sometimes [the presentation] is not the reality," he said. "They sell you a policy, but after two to three weeks you have a claim. The question is will the insurance company pay our claim? Claims management is the reality," Mr. Gorree said.

The risk manager pointed out that service issues are generally linked to staff levels in claims departments.

He said that big insurance companies and brokers in the Netherlands have too many managers and not enough back office staff. "There are too many chiefs and not enough Indians," he said.

And risk managers do not want to be forced to listen to the brokers and insurers squabbling over whose fault it is. They simply want good and fast claims management, said Mr. Gorree.

Then, two weeks ago, the U.K. Association of Insurance and Risk Managers revealed details of its so-called willingness-to-pay index, that it hopes will provide an objective benchmark of the insurers' propensity to pay claims.

AIRMIC Technical Director Paul Hopkin told Business Insurance Europe that he realized that the project is an ambitious one, that the major insurers already provide their customers with performance indicators of one sort and another and that the leading brokers have also created their own indexes to gauge performance.

But he said that a truly independent index is still needed and suggested that one of the big rating agencies may ultimately be well placed to provide the index.

And, at the annual meeting of Spanish risk managers organized by Asociación Española de Gerencia de Riesgos y Seguros, and a meeting of leading Italian risk managers and insurance executives organized by BIE with Associazione Nazionale dei Risk Manager e Responsabili Assicurazioni Aziendali, the Italian risk management association, guess what was high on the list of risk managers' concerns? Claims and levels of service again.

One of the Italian risk managers actually suggested it would be useful to have some kind of index of insurers' claims-paying service capabilities and track record without apparently being aware of the AIRMIC initiative.

Risk managers have a strong case on this one.

Insurance companies are always banging on about their commitment to raising service standards as they seek to differentiate themselves from the competition in what remains a highly competitive, cyclical market with all too easy to copy products.

And, the hype about service emanating from the insurers is currently more intense than usual as they face a rapidly softening market and the prospect of rapidly shrinking margins.

Investors in insurance companies that seek to offer coverage to AIRMIC, NARIM, AGERS and ANRA members will not accept the limp excuse that returns have plummeted because rates have done so, and quite right too.

The insurance companies must therefore listen to their customers and follow their fine words through with innovative thinking and superior levels of service that offer them a fighting chance to retain more business than they lose at a fair price to help them maintain their margins.

How they manage to do that without dangerously raising the cost base is up to the highly paid management with whom the investors entrust with their cash and from whom they occasionally need a little straight talking.

It is time to walk the walk.

A pre-emptive strike

Before our favorite reader writes to us tell us that we are insane to cover the energy security issue again, and report a potential link between it and climate change, let's get one thing straight.

It does not matter whether you believe that climate change is induced by human-created carbon emissions or a simple and very natural climatic cycle or not. The simple and irrefutable fact is that it is happening.

The temperature and sea levels are rising, the ice caps are melting and the frequency of natural catastrophes is on the rise.

So, you do not have to be a lilly-livered, sandal-wearing, bearded vegetarian, anarcho-syndicalistic philanthropist to state—or even simply report other people stating—that any sensible risk manager worth his or her salt should do something about climate change sooner rather than later, regardless of what has caused it.

Looking forward to a vigorous response.