That insurance has a significant role in the health of society is an undeniable fact. Whether it is through the services the industry provides which keeps businesses in operation and cars on the road, or through the sustainability initiatives and charity projects carried out by insurance companies, its role is fundamental. Now, in the wake of the recent storms buffeting the UK, the responsibility of businesses working within the insurance sector to provide information on how to mitigate and manage the damage of these weather events has been highlighted, and many companies have risen to this challenge.
Speaking with Insurance Business, market head P&C UK and Ireland at Swiss Re, Simon Welton (pictured above) detailed how, though the final cost of the damage being caused across Europe by the recent storms is still unknown, these events serve as an essential reminder of how important it is for insurers to prepare for these events.
“There are two key areas of preparation,” he said. “One is to be able to respond as quickly as possible to help customers and the longer term one is to really fully understand this risk.”
The best way for insurers to prepare, Welton said, is to have contingency plans in place, specifically for their claims handlers. He described how the sudden rush of people requiring very quick responses, when their homes have been flooded and they have no shelter or supplies, means that call centres must be on standby and loss adjustors must be prepared to respond very quickly.
Fully understanding the extent of this risk is becoming increasingly essential, Welton said, as flooding is clearly becoming more serious and more frequent, likely as a result of climate change. Insurers must be aware of this, he said, and aware that they are probably going to have to respond to more of these kinds of event in the future.
“The longer-term response from insurers is to try and get better at modelling the likelihood of these events,” he said, “and that’s more of a case of trying to get the price of insurance right, by understanding this risk better.”
Swiss Re has looked to help address key environmental and social challenges through its re/insurance solutions for several years and Welton outlined how the business partners with insurers to help them understand the impact of climate on their own portfolios. However, he said,, looking to the rapid changes occurring within the environment, these models are not necessarily going to be valid in five or 10 years’ time, so a large part of the research undertaken by Swiss Re is in regards to understanding this changing risk environment.
Beyond looking at the impacts of these climate events on insurers and looking to the end customer of insurance, Welton stated that brokers should be the better-informed part of the insurance relationship for their clients due to their role as a trusted advisor. In light of the continued adverse weather conditions shaking the UK, commercial account executive of Towergate Insurance Brokers, Christian Jones (pictured below), noted how businesses can mitigate these events and prevent costly and time-consuming claims.
The effects of such conditions on businesses does not only extend to the immediate damage to buildings and contents, Jones outlined, but includes the significant interruption which can be caused which will prevent a business from trading temporarily. The immediate actions which can be taken by business, he said, include securing any loose items in external areas, moving critical stock, contents and electrical items to higher ground and placing sandbags or flood gates at doorways out of hours.
Risk assessments should be carried out by businesses to protect both employees and members of the public, he said, and full attention should always be paid to Local Authority warnings. If damage has occurred, Jones summarised that the next steps for business owners are to make the area safe and then contact their insurance brokers as soon as possible if a claim needs to be made.
Businesses should try and keep insurance policy documents and contact details for electricity and water suppliers safe, preferably on a phone, Jones said, to ensure that contact can be made with their insurance broker quickly.
“Don’t let this delay you though if you need to make a claim as insurers and brokers can readily search their database should you not have your policy number to hand,” he said.
Jones detailed how, with the right preparations, these damages can be mitigated and planning for poor weather conditions can help a business to run smoothly.
“Ensure that the business’s insurance policy is regularly reviewed and suitable cover in place for the immediate damage,” he said. “Regularly reviewing business interruption cover to ensure that the correct sum insured, and indemnity period are in place can help to minimise any long terms effects to a business.”
