1. What is the session about?

The target of this session is to challenge insurer on their business model and to question their principle that insurance coverage shall depend on physical loss and damage scenarios only.

As industrial entities and their CFOs are increasingly using sophisticated models to assess financial risks resulting out of their business/programmes it became obvious that certain financial consequences can be also considered as insurable as far as the triggers are sudden accidental or out of the direct control of the industrial entity. A respective insurance solution can be provided by the way of a non-physical business interruption coverage.

Following my respective last year’s panel discussion on the occasion of the DVS Symposion in Munich, insurers are increasingly in process to work on solutions responding to potential demands for non-physical BI. Consequently this session is targeting to further challenge the insurance market requesting them to become more precise with their solution and giving the industry a guidance of their respective underwriting strategy and capacity they might be able to generate.

2. Why is it important?

In large industrial entities with complex exposures CFOs expect from their insurance risk management organisation to perform in developing solutions of risk transfer regarding financial consequences caused by non-physical BI scenarios.

The principle task is to enable the CFO to benchmark risk transfer solution with an in-house cost of capital model. Due to the mutualisation system of the insurance market it is likely that risk transfer incur less cost of capital than keeping it on the corporate’s balance sheet. On the other hand insurance risk management departments of industrial entities are probably not having the necessary recognition in their group and are not adequately experienced to respond to these demands. The workshop shall give some principle guidance supporting the stakeholders to better deal with the challenges they are faced with.

3. What will people learn to take back to their businesses?

Insurer shall receive a common understanding that industrial entities are ready to negotiate improved business models in depth as far as they are generating added value to their business. Consequently they will be also aware that a respective price element has to be considered.

The community of insurance risk managers will be requested to negotiate about their approach to the insurance market. In other words: convincing arguments are to be addressed to underline the seriousness of a demand for non-physical BI. All stakeholders shall receive the message that innovative solutions in the insurance markets can only be developed successfully by both: provider and customer.

Tuesday 4th October 2011 4pm-5pm

Session Leader :
Harry DAUGIRD, KOMPOSIT Risk Consultants and Insurance Brokers Ltd./ABB AG

Speakers :
Ingo R. ZIMMERMANN, EADS N.V. (Moderator)
Mark NEWBOULD, Claims Manager, AXA Corporate Solutions
Tassilo HUMMEL,Global Head of Property, Allianz Global Corporate & Specialty
Hans MEDERER, Global Head of Property Claims, XL Insurance
Nick RNJAK, Chief Underwriting Officer for Travelers Syndicate 5000, Lloyd’s of London
Werner SCHLÄPFER, Head Single Risk Property, Swiss Re