MarketForecast2022
The German Insurance Market
1
Realigning the focus on risk
The global fight against the pandemic is entering its third year. Economic restrictions continue to be very challenging for many companies. For the time being, fragile supply chains, tight commodity markets and materials shortages look set to continue to affect production capabilities in many sectors. This is why flexible adjustments remain the order of the day for the German economy. At the same time, companies are having to deal with a great many new risks that have emerged over the past few years. In view of the burdens caused by the ongoing pandemic, some of these highly relevant issues have not yet received the attention they deserve. As Aon's latest GRMS shows, this is particularly true for D&O risks, disruptive technologies and climate-related and environmental risks. Climate-related and environmental risks, the latter being included in the ESG criteria.
The Environmental, Social and Governance triad shows just how broad a concept sustainability now is. When it comes to risk management, businesses and their insurers alike often find themselves in the midst of a transformation process. The industry is facing a future dilemma: how can it successfully provide sufficient coverage going forward, despite the necessary limitations, to continue to fulfil its overall economic mission? By acting as an intermediary between companies and the insurance industry, we help our customers cover their operational risks. We do so, for example, by using in-house databases and analytical tools. Claims management also offers opportunities to implement promising ways forward. Consider, for example, the reduction in the costs of losses if damaged goods were to be reused. The use of eco-friendly materials during building renovation is also an effective long-term solution. It is more important than ever to take a holistic look at the global risk map. This is because global risks have become more complex. Companies can face these challenges in different ways, depending on their size, market position and their financial strength.
As consultants, we are challenged to reflect on such differences, for example when dealing with issues of risk transfer. It is true that certain environment-related activities should no longer be happening in a few years’ time. However, this should not detract from the fact that there is currently also an acute need for many companies to act when it comes to the transfer of sustainability risks.
We have been deeply shaken by the outbreak of war in Ukraine. In these difficult times, our solidarity and thoughts are with all those who are suffering in Ukraine.
The conflict in Ukraine not only threatens security in Europe, but will also have economic consequences, the extent of which we are currently unable to predict. Nevertheless, our risk experts are constantly analysing the latest developments and continue to support our customers to help them make the right decisions.
Hartmuth Kremer-Jensen
Chief Broking Officer D-A-CH | Deputy CEO Germany