Q2 Aon Advice to Clients
Evolve Your Engagement with Insurers
Find the balance between virtual and in-person engagement with insurers. While virtual engagement has become common, create opportunities to connect in person to strengthen relationships (while not requiring in person meetings if doing so could delay the renewal process). Leverage tech and digitization to enhance efficiency and tap into available data to provide the most accurate, robust information. Provide access to the right senior-level people in your organization during the underwriting process.
Allow Sufficient Time to Tell Your Story to Insurers
Underwriting rigor has strengthened, and the process has become more centralized, often leading to referrals, escalations and longer timelines. Start the renewal process early, and allow time to demonstrate sound risk control practices, describe your valuation methodology, highlight improvements implemented, and share the lessons learned from past claims. With the heightened focus on risk selection and a growing demand for quality data, allowing adequate time will position you to tell your story in detail and respond to any queries that may arise.
Evaluate Your Exposures and Valuations to Account for Inflation and Supply Chain Disruptions
Supply chain disruptions stemming from the events in Ukraine, Belarus and Russia, the lock-downs in China, and the continued impacts of COVID-19 - combined with inflationary pressures and rising labor costs – are driving up costs and extending timelines. To guard against underinsurance, some insurers are imposing co-insurance or margin clauses. To ensure that sums insured, limits and deductibles are appropriate and up-to-date, work with Aon and across your organization to conduct a thorough assessment of your exposures and valuations.
Review Your Cyber Risk and Policy Language
Ransomware activity continues to increase in frequency and severity, and the events in Ukraine, Russia, and Belarus have further exacerbated an already challenged risk landscape. Work with Aon to review your policy language related to sanctions as well as any exclusions that may limit or preclude coverage for cyber incidents – especially those related to the events in Ukraine, Russia, and Belarus. Be prepared to invest in strengthening your risk control measures (e.g., Multi-factor Authentication) to protect your organization and to help you secure Cyber coverage. Use Aon’s CyQu to differentiate your risk. Consider risk transfer alternatives such as captives / cells.
Partner with Insurers on Matters of ESG
Insurers are becoming increasingly focused on Environmental, Social and Governance (ESG), looking carefully at the environmental, social and ethical risks that can arise from myriad complex, interconnected factors. Underwriting questions related to ESG maturity and plans for achieving disclosed targets have become prevalent, and insurers are considering the value of ESG ratings for underwriting purposes. It is more important than ever to develop proactive ESG strategies and be prepared to share your plans with potential insurer partners.