How can I improve my risk management?

Topics: What is so special about the IPGs – the Industry Practice Groups?

Beatrix Hartinger: We use the IPGs to bundle the knowledge we have of complex or particularly exposed industries. The aim is to gain an even better understanding of the risks involved by talking to clients more, building up global databases and performing extensive analyses. In short, we invest in accumulating specialist industrial expertise, and the clients we work with benefit directly because we are not only able to take on significant commitments with regard to complex risks, but also share our risk management expertise with them. Our special expertise enables us to offer our capacity on a net basis, i.e. with no further reinsurance being necessary, and continuously.

Which industrial segments has CIP specialised in and why?

The reasons why are very clear. We are aware from many discussions and client interviews that we are expected to come up with precisely the right solution and to have substantial capacity available. In the long term, we can only offer both of these at prices commensurate with the risk if we know the complex processes specific to the industry and company concerned, are aware of possible constraints and have a precise understanding of the risks. We have therefore already created six IPGs – for the semiconductor and electronics industry, railways, pharmaceuticals, the automotive industry and telecommunications. Other sectors will follow, for example the paper industry.

How do clients benefit? What value do you add?

We learned from numerous client interviews last year that for many clients the price of cover had long since ceased to be the only thing that mattered. They attach particular importance to their partner's expertise, additional services offered and the insurance solutions and services corresponding exactly to their needs, especially in complex industries. We provide the key with discussions and exchange of information tailored to their profile and by working with clients very closely – that extends, for example, to support with and advice on loss control engineering.

What services do you provide in practice?

Let's take an example from the railway industry. Natural hazards and technology are key factors not only in risk management and loss prevention, but also in the assessment of exposures. At CIP, we make use of Munich Re's possibilities and ensure that the engineering knowledge we have and the latest findings in geo risk research are fed into the work of the IPGs. In the case of railways, we compare the data of the rail network concerned with our various natural catastrophe maps. This also enables our clients to see their own exposures more clearly.

What information flows into the analyses performed by the various IPGs and how do you process it?

Data are the raw material for our analyses, so we use all of the sources available, which include various statistics accessible via the internet and our global loss data, in addition to information received from clients. There is no shortage of raw material, but the challenge is to collect the data in a structured way and prepare them properly to ensure that the analyses we perform are useful and pertinent. We have already made a lot of progress with our specialisation within the IPGs.

Are you able to make use of the progress made and the knowledge accumulated in the IPGs to provide benchmarks for individual clients?

That will be, I think, one of our most important services. We already offer it selectively. The risk managers we deal with at client companies are keen to improve continuously. They look to us for support and expect us to be able to tell them how they compare with competitors, what other companies are doing better and where they most need to take action. The knowledge of industries gained via the IPGs enables us to provide substantiated answers. We strictly maintain the confidentially of data relating to individual clients. We don't produce any rankings, but are able to provide meaningful benchmarks compared to market averages.

Where do you go from here?

We have been insuring industrial clients for years, offering them substantial capacity. We are only able to do that because we are good at assessing and evaluating even complex risks. But that's just one side of the equation – the other side is what our clients need. Advice and services in risk management will become increasingly important for them. We at CIP will therefore be talking to them even more – not only via the IPGs – and further sharpening the focus of our analyses to ensure that we continuously improve our offering.