Frankfurt The insurer Zurich expects that in view of the many new risks, companies will not always be able to find suitable insurance cover in the future and is therefore increasingly focusing on prevention offers.
“The risks associated with natural hazards, cyber attacks and supply chain networks are becoming ever greater and more unpredictable for the insurance industry,” said Petra Riga-Müller, board member for the industrial customer segment of the Zurich Group Germany, the Handelsblatt. “That’s why we’re expanding our consulting services even before the loss event occurs.” It is important that insurers work proactively, preventively and with their customers.
As the number of major claims continues to rise, “in the future, insurers will no longer be able to comprehensively cover all risks,” adds Paulos Asbe, who heads the Zurich Resilience Solutions unit in Germany. There is already insufficient capacity in some areas, such as cyber insurance, and premiums and deductibles are constantly increasing. “Companies are increasingly asking themselves whether they can afford the insurance premiums or whether they can bear the risks themselves,” says Asbe.
It also makes sense for insurers to focus more on prevention offers in order to remain a relevant partner for customers in this environment. According to its own statements, Zurich has the world’s largest cross-sector network of experts for risk prevention among insurers and has recently significantly expanded this unit to now more than 800 employees worldwide.
Top jobs of the day
Find the best jobs now and
be notified by email.
Asbe is convinced that a large part of the damage to companies could be avoided: “This way of thinking is becoming more and more popular with our customers.” Not only large corporations, but also medium-sized companies are increasingly willing to pay for additional preventive services.
Companies need support for temporary shutdowns
Asbe is currently observing that companies need support, especially with a view to possible plant closures in the winter months: “Recently, we have been increasingly approached by customers from the upper middle class that they are considering locations because of increased prices, missing supplier parts or imminent energy shortages to close at least temporarily.”
This poses risks that the companies have not previously been confronted with: in the case of aluminum smelting, glass furnaces and, if necessary, clean rooms, it may be necessary to continue operating them even during a temporary site closure. “A shutdown would mean unknown damage to property and a long downtime when restarting operations,” says the Zurich expert.
During a shutdown in winter, water damage is particularly common when “pipes freeze and burst open”. Snow loads can cause hall roofs to collapse if the snow is not removed as regularly as is usual during operation.
Damage also often occurs when machines are started up by personnel who had to be rehired and trained after a crisis. “Companies should therefore consider how they can retain as many employees and their expert knowledge as possible despite the looming recession,” says Asbe.
In principle, business interruption insurance covers the resulting damage. “If a fire or an explosion occurs due to the shutdown or startup of machines and during the shutdown period, there is usually insurance cover,” says Asbe.
However, the insurance association GDV had already pointed out in the summer that a standstill in production and the associated loss of earnings are not insured if they are only due to a general energy shortage without specific material damage in the company.
Asbe finds it more problematic that companies are constantly facing new risks for business interruptions, be it the aforementioned cyber attacks, natural disasters, pandemics or the consequences of war. Some of these risks are potentially uninsurable – namely when they become “incalculable for insurers”.
According to Zurich Germany board member Riga-Müller, it is all the more important to avoid potential dangers before damage occurs and to mitigate future risks as far as possible.
More: Gas stop is not insurable for companies