Allianz Risk Consulting Head
(AGCS Italy and South Africa)
shares lessons learned

What I see from a Risk Engineering perspective is that many years of a soft market prevented the improvement of loss prevention and protection levels in many businesses. With cheap insurance there simply wasn’t enough pressure to adopt prevention and protective measures above the minimum compliance requirements. With the market showing signs of hardening, I expect this to change quite rapidly and I would not be surprised to see more investments in fire protection systems and the creation of new captive insurers in the next years, if not months.

• I saw many players working on renewals very early. In some cases more than six months before expiration. Definitely a sound thing to do in such an uncertain environment. Those that underestimated the impact of the pandemic and the hardening market were caught off-guard and I believe it was not the easiest renewal season for them. I surmise that there’s an increased need for stability and this prevented aggressive re-marketing as we saw in past years. The main lesson for me  as a Risk Consultant and Business Continuity specialist, is the importance of risk awareness and preparedness.
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• Many businesses across the globe suffered some degree of disruption. In some cases severe disruption, due to the effects of the pandemic on their supply chain, their staff, their clients, etc. I noticed that those with a good Business Continuity Plan are faring better now, even if the pandemic was not considered in the plan. The exercise of thinking through the entire organization, to find out how to keep it running in case of a crisis, clearly made them more resilient and proved very useful in this situation. I’m not saying that we could have foreseen or prevented the pandemic, as this would be too easy now with the benefit of hindsight. Quite the opposite, my point is that we cannot foresee every possible threat and be prepared for the main ones. Those that we can identify act as a cultural vaccine against the unknown and make the organization more resilient.

• The pandemic unfortunately had a severe impact on the results of many of our clients. One of their main concerns at the moment is dealing with the vast uncertainty brought by the pandemic. They are working on adapting to the “new normal” and striving to recover. I truly hope they succeed. I also believe many insurers are under pressure to improve their underwriting results but not all of them have the technical expertise to do that properly. I have been working in insurance since 1993 and I’ve seen a widespread loss of technical expertise due to the soft market over the years, especially in the last decade. I think it is a huge human capital loss for the sector that will create difficulties for many players, especially in such a harsh economic environment. Fortunately this hasn’t happened to AGCS. At the cost of being sometimes considered meticulous during our risk assessments, we kept our technical expertise at high levels. We all prefer having a meticulous doctor, so, why not the insurer of our business too?

• The context is difficult. AGCS has been affected by the pandemic. However, we have two features putting us in an excellent position to thrive in the future - The Allianz Group's formidable strength and our extensive technical expertise. With such a powerful combination, I’m sure we can fare very well and keep providing stability and security to our clients.