The article highlighted a number of areas where underwriters could offer more flexible coverage or new insurance products, they are:
1. Repackaging of onshore terrorism cover into property programmes.
2. Deletion of cyber exclusions.
3. Increased sub-limits for contingent business interruption (CBI) or supply chain risks.
4. A seamless product for onshore projects covering handover from construction to operating phases
5. Increased flexibility of aggregate limits and retentions for natural catastrophe risks.
TERRORISM AND CYBER EXCLUSIONS CLAUSE
The exclusion of terrorism acts only started few years ago due an increase in global exposure to terrorism. To ensure that the risks are mitigated adequately, a blanket exclusion was applied to all policies. With new and historical information on the definition and acts of terrorism, property programmes with low terrorism risks could include the coverage.
With the boom in products and services being sold and conducted online, why not introduce a new product covering specifically cyber risks with specific underwriting requirements to help and guide businesses in mitigating and minimizing their cyber risks.
SUB-LIMITS
The article reported that Sub-limits for contingent business interruptions (CBI) or supply chain risks are still low in the natural resources section. I believe it takes time for risk managers to understand the risk and with adequate historical data, the sub-limits will gradually increase. Not forgetting the risk managers should have adequate capital available from other portfolios to support higher sub-limits.
HANDOVER FROM CONSTRUCTION TO OPERATING PHASES
I believe the seamless product would incorporate elements from Professional Indemnity insurance providing coverage on claims after the handover/completion stage and warranty and indemnity insurance covering disputes or misrepresentation by either parties during an M&A process.
LIMITS AND RETENTIONS FOR NATURAL CATASTROPHE
The article indicated that if more capacity is made available, there will be an increase in revenue streams and pushes for flexibility in limits and retentions. There is a huge appetite for natural catastrophe risk transfer products and i will cover Catastrophe Bonds and its features in subsequent posts.
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