The complexity of today’s operating environment is only compounded by the interconnectivity of the risks facing businesses of every size and across every region. It is a real example of a ‘polycrisis’ environment, noted Nancy Bewlay, chief underwriting officer for the AXA Group, and there’s no sign of external market conditions – be those political, social, economic or otherwise – starting to stabilise.

The insurance industry is one specifically tied to serving client needs and, as a result, its underlying motivation always needs to be to question what people expect from insurance and how that’s changing – and to find new ways to deliver on those expectations. “We provide economic stability if we do what we do right,” she said in a recent interview with Insurance Business.

Evolving beyond traditional risk transfer products

On the one hand that’s about providing the protection of a classic insurance product, and on the other, it’s about helping clients build the right preventative solutions so they’re in a position to be ready for what the future holds. Having spent the first half of her career largely on the more traditional risk transfer side of the industry, she highlighted that it remains a deeply rewarding experience to find ways to combine insurance and risk prevention as a holistic solution.

“I think the polycrisis world in which we live today means we have to do much more for our clients, and being AXA that means that we don’t wait for others to figure it out. We actually set the market,” she said. “We have to look at, globally, what’s occurring, and we have to prepare, not only ourselves but the industry and our clients for the direction of the world.

“I think that’s a much more sustainable way to think about who we are to our clients – which means I have to use that view as the technical foundation for how we build our products and services. It’s a blend between knowing where we want to go and why, and creating the right technical foundation required to carry us along.”

Understanding an increasingly interconnected risk environment

There’s no doubt that the present risk environment is a complex one, Bewlay said, but where the real challenge lies is in that it’s becoming even more interconnected as the world becomes interconnected. There was a time when crisis and risk tended to be quite isolated, and what was happening in one country wouldn’t necessarily impact another, but the intersecting nature of the modern supply chain means these risks are inherently connected.

Today, the world is connected by how goods and services are moved around the world, she said, and so a risk impacting one area is bound to have a knock-on effect. In addition, due to new technology and the rapid proliferation of social media, what happens in one part of the world is now known almost immediately in another. “So, we used to think about building a diversified portfolio to mutualise risk, and you didn’t worry as much about your aggregations across the world.

“But today, when you think about how connected our industrial processes are… you see that we’re incredibly diversified into really big aggregations. And being able to understand the construction of the portfolio and, for example, how something in Germany is going to impact what happens in Brazil, is the global view that you need when you’re a global carrier.”

Building a long-term view of risk

As to how insurance players can go about fostering a truly long-term and holistic view of risk in order to support both brokers and clients, Bewlay emphasised the importance of balancing immediate risks with emerging concerns. If insurance companies can’t evolve what they’re doing today to meet future challenges then they run the risk of becoming obsolete, she said, because they won’t be able to provide what the market needs.

“Brokers and agents, for a long time, said the insurance companies are becoming irrelevant because they’re really not leaning into risk, they’re not providing what we need to bring to our clients and they exclude more than they cover,” she said. “To be relevant to our clients and to the brokers and agents working with those clients, you have to be willing to take risk, but you have to do that in an educated, technical way, so that you’re there when the thing does go wrong, and you build trust with your client and your broker or agent.”

For AXA, which supports clients, agents and brokers all around the world, she said getting the right balance between talking about the present and the future has been enabled by the fact that the distribution channels have got better at representing and talking about the true needs of their clients versus complaining about what carriers aren’t doing. “What I hear is – here are the big issues. Can we work on them together? What type of products can we develop? How do we actually service the need in the industry?

“So, there’s a little bit more of a partnership there, in our broker and agents markets now… And what we’re doing across the world is not just looking at what the client needs. We’re also trying to help influence regulation and predict where regulation is going. And certainly, in the areas of evolving or new risk, we’re trying to be at the forefront of finding the best utilisation of all the assets around us.”