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VENICE, Italy — Insurers and their commercial customers must adapt their strategies to keep pace with the rapidly changing global economy.
Technological developments are not only increasing the risks that companies face but are also changing the relationship between risk managers and the insurance market, several industry experts say.
To remain relevant, insurers must move away from solely offering financial protection and instead offer a range of services that help organizations grow their business, they said during various panel sessions at the Federation of European Risk Management Associations' 2015 Risk Management Forum in Venice, Italy, this week.
The nature of global business is changing as start-up companies turn into global giants in just a few years, said Anthony Baldwin, managing director and head of distribution, EMEA at American International Group Inc. And some of those relatively new companies, for example Google Inc., are looking to compete in the insurance sector, he said.
To stay in the game, “we need to fundamentally change how we approach the industry and marketplace,” he said.
Insurers need to recruit employees with nontraditional skills, such as data scientists, and enter into partnerships with more companies outside of the financial sector to offer more relevant services to their policyholders, Mr. Baldwin said.
The global economy is seeing rapid and fundamental changes, agreed Paolo Ribotta, head of global corporate and commercial at Generali Group.
As a result, policyholders “are asking more and more how can we help them in value creation,” he said.
To help meet those demands, insurers need to focus more on providing services rather than their traditional role of providing contingent capital after a loss, Mr. Ribotta said.
As organizations become more concerned about the risks they face, the role of the risk manager is becoming more important, said David Batchelor, president of Marsh International, a unit of Marsh L.L.C. “Creating value and remaining relevant is key to the risk manager's role,” he said.
With the growing interest of boards in risk management, risk managers should formalize their insurance strategies, said Alexander Mahnke, CEO Insurance at Siemens Financial Services, the financial services unit of Siemens A.G. in Munich.
“You have to write it down, and it has to be logical, and you have to have it signed off by the board,” he said.
With the insurance strategy formalized and approved by the board, risk managers do not need to seek board approval for individual insurance buying decisions, Mr. Mahnke said.
“I'm still a little flabbergasted about how (few) insurance strategies are put on paper,” he said.
Three new vice presidents will join the Federation of European Risk Management Associations, the association said Thursday.