Russell hosted an event involving six global corporates and a dozen alternative risk transfer (ART) specialist underwriters to discuss how (re)insurers and corporates can move beyond traditional risk mitigation for balance sheet connected risks to an outcome-based solution.
The discussion, which was held at the Apex Hotel near Tower Hill in EC3, defined a new kind of outcome-based connected risk cover as a scalable risk mitigation structure that:
Moves beyond traditional risk mitigation.
Is designed to be flexible vertically and horizontally.
Uses balance sheet connected risks to define the maximum risk appetite and total portfolio loss exposure
Comment from David Broughton
David Broughton, who recently left Centrica to join Russell as a corporate consultant, chaired the meeting and said: “The global (re)insurance market and its corporate clients need to think of connected risk, particularly how it applies to non-damage business interruption cover, as a capital management solution, not just insurance.
“This is much more than a traditional multiyear multi line programme that focuses on the obvious property or casualty risks, but more those complex risks that fall into the 60%-80% of balance sheet risks that are uninsured. The next steps for the market going forward are to make progress to define risk appetite before it can be priced.”
Comment from Suki Basi
Suki Basi, Managing Director of Russell said: “There is a growing consensus that more work needs to be done on building out from risk financing solutions into structures that develop into connected risk transfer solutions.
“Cyber was cited as an example of a market that had to be restructured and revised from its early days, into the model it has become today. In its early days the gap between clients’ expectations and the product on offer was huge. It is similar for the types of risks we are describing today, if everyone agrees to a fundamental re-structure. What is needed is a major cultural shift in attitudes.”
Next Steps
There was broad agreement that it is now time for a collective agreement between insurers and corporate to engage in an industry data gathering exercise. More research is needed. The industry still faces the problem of the heterogeneity of the risks in these emerging markets, which serve to stifle innovation and any prospect of real change.
One approach could be to focus on business models rather than industry types to help facilitate the cultural change that is required. Russell will be bringing these takeaways to the Airmic Conference at the end of June 2026 and seeking wider engagement at that event in Birmingham.
