Risk Managers Prepping for Hardening P&C Insurance Market
A Towers Watson survey conducted over February and March has found that a majority of corporate risk managers (63 percent) were moderately to seriously concerned over a hardening property and casualty (P&C) insurance market. An additional one-third of respondents expressed at least a slight concern. Given this data, it is no surprise that most companies are moving to preempt potential hardships by taking steps to prepare for the market change. HR management responsible for enterprise risk program implementation will likely see changes.
Of the participating property respondents, 69 percent indicated that they are marketing their programs while 63 percent of casualty respondents reported the same. One third of property respondents are also using broker provided catastrophe modeling while casualty respondents are relying on actuary-provided retained loss analytics (44 percent) and predictive modeling (30 percent). But 22 percent of respondents reported being unaware that property catastrophe risk modeling had undergone changes.
“With all signs pointing to a hardening market, actively engaging in the use of analytics is a great way for companies to prepare themselves for change,” said Steve Levene, Risk Advisory and Brokerage practice leader. “This also provides brokers with an opportunity to help their clients better see the linkage between effective analytics and preparation for a hardening market. It is a connection that was not as essential in a soft market, where coverage was more accessible and relatively inexpensive.”
Despite urgent reasons for doing so, less than 60 percent of respondents said that their organizations have enterprise risk management programs (ERM) in place. In fact, 40 percent reported that the value of ERM had been insufficiently articulated to them while an additional one-quarter said that, regardless of value, ERM was too expensive for implementation.