Insurer capital is returning to regular levels with a majority of short-tail claims now settled, allowing the industry to invest in the development of products and targeted risk management solutions, according to Aon Risk Solutions.
Steve Nevett, chairman of Aon Risk Solutions Pacific Region, said the APAC region had suffered significantly during the string of natural disasters in 2010 and 2011.
“With insurer and re-insurer capital and capacity significantly depleted as a result, there was limited opportunity for innovation and development – despite the clear need for new solutions as industry risk profiles change,” explained Mr Nevett at the Aon advanced risk finance conference held in Melbourne this month.
“However, the relatively clear run that we’ve had over the past two years in Australasia has helped the market find its feet and apply its growing capacity to underwriting new risks and expanding product offerings,” he added.
Duncan Khoury, marketing manager at Aon Risk Solutions, said Australasian organisations of all sizes are demanding new products that more comprehensively address risk issues such as network security and privacy as well as brand and reputation.
“It is imperative that the broking industry works hand-in-hand with insurers to develop product offerings that meet the contemporary requirements of Australasian requirements, in an environment that is becoming more challenging by the day,” said Mr Khoury.
The risk management techniques and strategies used by leading corporations such as UPS and Coca-Cola Amatil was another topic discussed at the Aon conference.
“A key lesson from both was that business cannot treat supply chain risk mitigation as a ‘set and forget’. Instead, each potential risk should be addressed in line with need and adjusted as circumstances change,” said Mr Nevett.
He said the UPS case study showed that managing risk can be a difficult task for any corporation, regardless of size.
“From an internal perspective, best practice risk management is dependent on all the parts – people, processes and technology – working together seamlessly,” he said.
Mr Nevett said the case study of Coca-Cola showed the importance of companies continually monitoring the types of risks applicable to their individual situation in ensuring the appropriate protection is in place.
