News
Airmic's Annual Member Survey reveals reputational risk as risk managers' key concern
Reputational risk exposures are the subject most likely to keep risk managers awake at night, according to Airmic's annual survey of members. Nearly a third - 32% - regard it as a great or very great cause for concern. The subject is now a greater priority than insurer solvency, the issue that dominated much of the past two years, which 22% still regard as a significant worry.
Getting insurance losses paid continues to cause difficulties, however, with 27% of respondents having had a claim declined in the past two years. Only 59% rated their lead insurer's speed to pay as ‘good' or ‘very good'.
43% of members say their level of concern about the compliance of international insurance programmes has risen in the past twelve months, whilst no one has seen an improvement. There has been considerable discussion within Airmic about the near-impossibility of ensuring that insurance programmes are internationally compliant. Failure to get it right can result in fines, non-payment of claims, gaps in cover, increased taxation and bad publicity.
The survey also found that risk management resources had been squeezed during the recession, with 51% reporting lower departmental budgets, 26% staff reductions and 38% lower bonuses or pay. At the same time, they are being asked to do more. 53% report that their responsibilities have broadened while resources are cut.
Airmic members see the soft insurance market running out of steam in all their main classes of business with more of them anticipating rises than falls in the coming year (29% v 10% in Property/Business Interruption, 34% v 10% in Employer's Liability, 31% v 9% in Public Liability, 63% v 6% in Motor third party, 40% v 11% in D&O and 41% v 4% in Professional Indemnity).
Broker remuneration remains the issue that will not go away. 40% of commercial insurance buyers have observed an increase in the number of brokers seeking remuneration from insurers for services not directly connected with the placement of individual policies. More than a quarter - 27% - believe that the way their brokers are paid could give rise to conflict of interest.
The survey took place in June with 96 Airmic members taking part. Airmic represents nearly 1,000 professional insurance buyers and risk managers, including more than 75% of FTSE 100 companies.
