Ground–up insurance doesn’t always cut it

Are you in the driver’s seat when it comes to risk?

According to Howden Analytics UK, Times are – a changin’, these changes are having a sizeable impact on how businesses are protected from risk.

The report highlighted megatrends such as higher inflation, climate change, elevated catastrophe loss activity, as well as cyber threats making the risk landscape more challenging to predict. So where does that leave organisations who are already facing unprecedented pressure?

Premium increases (whilst showing signs of steadying) are still prevalent as some Insurers shy away from rising climate related catastrophes like Cyclone, flood and bushfire, and cyber risks are now on a continued upward trajectory.

According to the Swiss Re Institute, insurance premium growth is forecast to reach 3.3% in 2021 and 3.9% in 2022, surpassing $7trn for the first time ever and a 10% increase on pre-pandemic premium levels.

This is driving a major ‘re-think’ of traditional insurance arrangements and how Alternative Risk vehicles enable businesses to take the wheel.

Why would you want to self-insure?

Whilst Howden Analytics UK identified climate change as a key driver, with “~£100bn average annual catastrophe loss since 2017”, this is being “rapidly offset by new solutions and growth opportunities.”  Alternative Risk vehicles is one such innovation, offering a beacon of light on the road, when traditional insurance no longer provides this certainty.

Take back control

Alternative Risk Transfer vehicles allow businesses to transfer their risk without sole reliance on traditional insurance methods, or to take on some or all risk internally. Either way, the primary goal is to control risk, and when you control risk – you control outcomes.

Alternative Risk Transfer vehicles such as Discretionary Trusts, Captives and Parametrics solutions, are experiencing increased demand as businesses look for innovative ways of protecting some of the more complex and/or less desirable risks. Its appeal lies in its ability to combine elements of traditional and self-insurance strategies, providing greater flexibility and control for businesses.

Clients benefit from:

• Gaining greater control of their overall risk profile.
• Greater autonomy and an understanding of their risk, with the capability to take exposures ‘in-house’ 
• Reaping financial benefits, by optimising transfer of risk for overall cost benefit
• Affordability via crafted solutions saving you money for the long term
• Removing the dependence on traditional insurance, and its exposure to higher excess, lower limits, waning insurer appetite. 

What is the right combination for my business?

Our Alternative Risk Management Services Division at Howden seeks to educate businesses on the range of solutions available by conducting a feasibility study to help determine which particular vehicle/s are best fit for your specific requirements from an experienced, unbiased perspective.  

Our feasibility reports carefully step through every facet of self–insurance vehicles, with a thorough examination of individual business and risk requirements. Our feasibility study report provides:

1. Depth and detail of our data analysis for applicable covers.  
2. Comprehensive summary about the range of Alternative risk vehicles available
3. Assessment of the right level of self-insurance, and
4. Detailed recommendations with next steps. 

These recommendations are backed by Howden’s extensive data and analytics capabilities and global network.

Where to next?

Are you ready to take control? It starts with you. Talk to us about your needs, your vision, and what will work best for you.    

Get in touch with us now to discuss your next move.