Briefing: Winds of change blow at Airmic as risk managers seek discourse diversion

By Jon Guy

This week (3-5 June 2024), all eyes have been on Edinburgh, where brokers and insures have been meeting with risk managers at the annual Airmic Conference.

The event has a hugely different feel to the Biba conference and, while there are some common themes, the risks discussed are often very different.

Such has been the case this year, where political risk and supply chain threats have been the dominant topics for many risk managers.

There is clearly a sense of shock at the way the past twelve months have made a tough situation far worse – last year, for example, the ongoing war in Ukraine had risk managers and insurers discussing how they could mitigate the risks that has emerged from the impact across Europe and the Black Sea states.

This year, the ongoing crisis in the Middle East, the blockage of the Suez Canal and Red Sea has created a new critical threat to the global supply trade.

And if the Red Sea crisis was not bad enough, the impact of climate change to the water levels in the Panama Canal – which has seen transits fall by 40% and restricted the size of the vessels able to navigate the canal – has turned the crisis into an almost black swan event for maritime trade and the 90% of goods that are transported by sea.

Sea change

There has also been a sea change in the approach of risk managers and their relationship with their brokers and insurers.

Risk may have evolved, but risk managers have been saying that the products and services the industry delivers need to evolve with it.

Many of the major multinationals have a balance sheet that can withstand significant shocks and, therefore, the requirements from the insurance industry are less about the financial protection it can offer and more about the expertise it can deliver to manage and prevent risks before they become reality.

The discussions in Edinburgh have centred around how risk managers can access data and expertise to identify risks and tackle action before they impact their operations, with brokers saying they are increasingly discussing prevention rather than cure when it comes to client concerns.

The global supply chain has had a huge shock to its system and risk managers are fearing that geopolitical risks will only increase.

As such, they are demanding that their brokers and insurers create solutions that go beyond the protection of bricks and mortar – and move to protection of reputation, brand and the ability to trade.