Report shows increasing adoption of captives in risk management strategies, with vehicles to be used to cover property, cyber, liability and supply chain risks over next two years.
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Risk managers are continuing to adapt their insurance strategies in response to challenging market conditions, as concerns increase regarding the potential for key exposures to become uninsurable in the future, according to the Global Risk Managers Survey 2024 produced by FERMA in partnership with PwC.
According to the survey, the most impactful insurance market trends for risk managers continue to be increasing premiums, reductions in capacity, and exclusions of specific risks, while wording changes now rank fourth, up two places since the Global Risk Managers Survey in 2022.
The global edition of the survey, based on responses from over 1,000 practitioners in 77 countries, was extended beyond Europe for the first time in 2024 and included members of risk management associations in the US (RIMS), Asia (PARIMA), Australasia (RMIA), Latin America (ALARYS), South Africa (IRMSA) and French-speaking risk managers via Club Francorisk.
Changing insurance strategies
Challenging market conditions saw risk managers adapting insurance strategies and programmes accordingly. 54% of survey respondents have changed their buying patterns following a review of areas such as coverage requirements, limits and sub-limits. 44% indicated efforts to strengthen loss prevention activities, while 30% looked to negotiate long-term agreements or policy roll-overs.
“Risk managers recognise the increasing influence of economic shifts, geopolitical uncertainty, regulatory developments, and the changing risk environment on insurance market dynamics,” said Charlotte Hedemark, President, FERMA. “In response, they are advising organisations appropriately and taking considered and necessary actions to adapt their buying strategies and prevention activities, particularly given expectations of further market hardening.”
Concerns growing over insurability
The survey findings show increasing concerns by risk managers regarding a potential increase in potentially uninsurable risks in the future. 53% of respondents believe that key business activities and locations will become uninsurable, up from 41% in 2022.
Drilling down into the risks cited as most likely to become uninsurable, respondents cited climate change physical risks and natural disasters (73%), cyber-attacks (55%) and supply chain disruption (including raw materials) (34%)...
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