Mike McGavick, CEO of XL Group, told UK-based risk managers attending this year’s Airmic [Association of Insurance and Risk Managers in Industry] conference in Birmingham: “It’s a great time to be in your jobs, there is great opportunity for you to lead your organizations’ thinking about risk.”
Speaking on a panel debate focused on The State of the Insurance Market, McGavick said: “Excess capital, the low interest rate environment and the mutation of risk means insurers have to dig deep, working harder to find differentiating solutions and services. This environment provides risk managers with the opportunity to ask, what are we getting from you? And these searching questions are challenging insurers to innovate and stay relevant.”
He warned that “if we are not innovating we are not working,” and then outlined his key do’s and don’ts when pursuing innovation as follows:
1 – Don’t expect to make judgments on today’s risks based on long data sets – the pace of change means the industry can’t afford to collect ten years of data before providing a solution. Whole industries will come and go in that time.
2 – Don’t leave your best people on the most profitable business. Get them on the challenging business, stretch them and stretch the business to go beyond.
3 – Do accept and expect failure – there is a cost to innovating and it’s a cost we are happy to ring fence and bear.
4 – Do look for partnerships. Specialist, intellectual horse power can come from outside the industry – use consultants and seek expert advice.
In line with the conference theme, the future of risk, McGavick said: “If we are going to successfully advance into the future, the risk management community must continue to work closely with insurers to develop the new insurance products needed to support businesses as they progress.”
Source: XL Group