More than 50% of European and US risk managers will be using alternative risk financing over the next five years, revealed a survey from Ace European Group.
Ace said it compared research conducted by Ace USA among risk managers in Fortune 500 companies, with the results of a survey of risk managers in Spain, France, Germany, Italy, the Netherlands and Belgium.
In the US survey, 55% of risk managers indicated they expected to increase their use of alternatives in the coming year. Similarly, 50% of European risk managers said they would be, or expected to use, alternative risk financing tools, said Ace.
The European research surveyed the attitude of risk managers of over 500 companies. When asked whether they saw a trend towards spending on risk management rather than paying premiums, 60% said they did, with the vast majority (84%) also indicating that risk management was at the heart of their business.
Ace said the results of the comparison demonstrated the strong similarities between the European and American risk managers, reinforced by the alternative arrangements that risk managers were most commonly considering.
Of the European business questioned, 30% already had captives, with 43% of US risk managers stating captives would be used or expanded.
Despite the favourability of alternative risk financing solutions, the European research revealed a large percentage still placed business in their local and international markets, with Spain and Italy viewing insurance as their main risk-financing tool.
However, close to 50% of the European risk managers surveyed indicated that their local market did not adequately meet their requirements, with premium costs and a lack of capacity cited as the main issues, said Ace.
Ace Europe president and chief operating officer Michael Furgueson said: “The use of increasingly sophisticated risk management techniques by the European and US risk management communities has to be welcomed.
“However, the results of the research also highlight a challenge for insurers, namely how to deliver the alternative risk management and risk transfer capabilities required by risk managers.
“Failing to meet the changing needs of today's businesses could lead to some insurers facing a potentially diminished role.”
