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The re/insurance broking giant Aon has announced the launch of a tool that will help clients better visualize and understand their exposure to physical climate risk.

Aon’s new Climate Risk Monitor can assess the current and future exposures of an organization to key chronic risks such as drought, extreme rainfall, extreme heat, freeze, and wildfire. It uses different climate change scenarios and provides diagnostic reports on the impact on individual assets and portfolios as well as geographical visualizations.

“In developing Climate Risk Monitor, we utilized our wide-ranging scientific and business expertise to transform a wealth of well-validated climate data into useful information for clients,” said Liz Henderson, global head of climate risk advisory for Aon.

“The importance of this output extends beyond physical risk management – having a better understanding of climate exposures can also assist with human capital decisions around health and talent.”

With the tool, risk managers will be able to further understand the climate risk and inform property insurance placements for their organizations through collaborations with brokers from Aon in helping obtain optimal limits as well as renewals pricing.

The climate risk monitor can also help clients in assessing the changing risk profiles as well as managing risk in locations where conditions may be changing. The tool also assists in demonstrating climate understanding and planning to their stakeholders as well as supporting their climate disclosures. It will also aim to provide better information to insurers when it comes to risk selection as well as pricing and reinsurance renewals.

The tool uses standard IPCC (SSP-RCP) emissions scenarios through various time horizons to align with the regulatory requirements. The firm leverages several global climate model outputs that came from global academic and government institutions to produce relevant peril metrics.

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SOCAR Sigorta ve Reasürans Brokerliği (SOCAR Broker), a subsidiary of SOCAR Türkiye, has been authorized to operate as an accredited broker at the insurance and reinsurance marketplace Lloyd’s.

SOCAR Broker is the fourth insurance institution in Turkey – which includes 195 brokers – to secure a Lloyd’s license. Through being a broker at Lloyd’s, it will have access to a network of insurers and reinsurers, boosting its capacity to comprehensively serve clients.

In a press release, the broker said that it has extended its insurance and reinsurance brokerage solutions and will be putting focus on serving subsidiaries and stakeholders from SOCAR Türkiye. It will collaborate with domestic and global insurance firms as it looks to provide options to corporations and individuals.

SOCAR Türkiye is the country’s largest integral industrial conglomerate.

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As sustainability moves further into the spotlight for insurance stakeholders and customers alike, the industry must establish data standards to improve the quality of environmental, social, and governance (ESG) disclosures by insureds.

That was the rallying call at a forum organised by global re/insurance group Chaucer in late January. Chaucer’s sustainability experts have emphasised that uniform measurement and reporting methods would enhance progress tracking and foster greater trust among stakeholders.

“Our key message was to corral the industry towards thinking about data standardisation, making insurance an easier product to sell,” said James Wright (pictured), chief risk officer at Chaucer.

The call for standardised ESG metrics also resonates with concerns about the burden placed on brokers, who face a barrage of disparate questionnaires from various insurers.

Wright emphasised the need for collaboration to address the challenges of data standardisation and to streamline processes to alleviate inefficiencies and client frustrations.

“Standardising sustainability-related information would benefit clients, brokers, and carriers alike,” he told Insurance Business.

Sustainability– the challenges and opportunities

Aside from data standardisation, Chaucer’s Sustainability Forum tackled a spectrum of other pertinent industry issues related to sustainability.

The discussions encompassed the evolving landscape of ESG regulations, their impact on performance metrics, and the complexities surrounding carbon offsetting and decarbonisation efforts.

One point highlighted during the forum was the significant hurdles to achieving industry-wide standardisation. For instance, sustainability metrics are subjective, and quantifying certain data points, such as social impact or an entity’s carbon footprint, can be challenging.

“There is no definitive definition of what is ‘good’ in sustainability or ESG. Different stakeholders prioritise different aspects,” Wright explained. “Some firms are heavily interested in the environment and its importance. Others are more focused on social causes. How do you turn that into data? It’s incredibly difficult. So, we think there will be a core set of information and data that we fully expect the vast majority of stakeholders to be interested in.”

The role of data quality in ESG disclosures

As for the role of technology in sustainability efforts, Wright acknowledged its potential but emphasised the importance of data quality and reliability.

“While technology can aid data collection, ensuring robust and reliable data remains a challenge. Stakeholders must prioritise data accuracy to avoid pitfalls like greenwashing and regulatory challenges,” he said.

“When we talk about the data that we want to collect, it isn’t just about standardising the data; it’s also about improving the quality and robustness of that data to help us make informed decisions.”

Navigating regulatory challenges is another critical aspect of sustainability initiatives. Industry players must stay abreast of regulatory developments to ensure compliance and strategic alignment.

“Regulatory demands are evolving, albeit fragmented. Expectations for harmonisation and expanded regulatory scope are on the horizon,” said Wright.

Finally, Wright addressed the growing focus on decarbonisation.

While reducing carbon usage and using carbon offsets to achieve net-zero targets is critical for organisations, he cautioned against overlooking the risks associated with carbon offsetting projects and advocated for robust risk management strategies.

“Offsetting (carbon emissions) is crucial, but understanding the associated risks is equally important. We are exploring insurance solutions to mitigate risks associated with offsetting projects,” said Wright.

What’s next for Chaucer after its sustainability forum?

Reflecting on the next steps, Wright outlined ongoing efforts to standardise data and foster more collaboration and engagement within the industry. Alignment between brokers and carriers will be crucial because brokers can provide a realistic perspective on achievable goals and “bring a sense of pragmatism” to the debate.

“We’ve seen significant improvement in this regard, with engagement from major brokers in standardising approaches,” Wright commented.

Moving forward, Chaucer will continue to engage with market groups and stakeholders, advocating for standardised approaches and transparency. Wright also highlighted Chaucer’s partnership with Moody’s for the ESG Balanced Scorecard, which provides a standardised framework for evaluating sustainability performance, as a significant part of its efforts.

The scorecard uses up to 158 unique data points to assign scores across various ESG factors – including on the disclosure of greenhouse gas emissions, health and safety of workers and boardroom diversity – to give underwriters better visibility of a client’s current ESG performance. It is also adaptable to evolving sustainability priorities over time.

“The Balanced Scorecard allows us to align our sustainability objectives with the UN Sustainable Development Goals, providing a unique framework for assessing ESG performance,” he said.

Ultimately, better data quality and data standardisation is a journey that the entire industry must undertake together.

“Several peers I spoke to are wrestling with the same problems Chaucer has in getting good data,” Wright reflected. “There’s no-one out there who’s knocking it out of the park when it comes to this. We’re only really going to be able to get better as a marketplace.”

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Specialist insurer CFC has announced its foray into the carbon insurance market with a brand-new offering.

The newly introduced Carbon Delivery Insurance by CFC is also notably the industry’s first product designed to safeguard businesses against both physical and political risks that could impede the delivery of voluntary carbon credits, the MGA states.

The new policy guarantees coverage for the full value of the buyer’s investment in the event of non-delivery of carbon credits, providing a significant layer of financial protection.

With the new proposition, CFC explains that it aims to further associate with the voluntary carbon credits market, a sector experiencing rapid growth and increasing demand for risk mitigation solutions.

Utilizing a new underwriting approach, CFC evaluates the carbon project itself rather than the policyholder to eliminate the need for extensive application procedures, allowing for same-day quote and policy issuance. This product is available for over 300 carbon projects, with the list expanding.

CFC’s entry into the market was also driven by a recent survey of over 500 companies actively participating in the voluntary carbon market (VCM), with results revealing significant concern among buyers about potential delivery shortfalls. Three quarters (75%) were revealed to be “very concerned” and 65% have already faced losses due to non-delivery.

George Beattie, head of innovation at CFC, emphasized the role of insurance in promoting positive change within the voluntary carbon market.

“By facilitating risk transfer, we believe that insurers can drive positive change while getting ahead in a market whose value could exceed $1 trillion by 2050,” Beattie said.

To further its objectives, CFC has also partnered with IncubEx, a carbon innovation platform, to integrate its carbon insurance products within carbon trading venues and facilitate connections with specialized insurance brokers. Neil Eckert, chairman at IncubEx, praised CFC’s initiative and innovation, recognizing the critical role of insurance in scaling the carbon markets.

“To facilitate investment and encourage liquidity across the voluntary carbon market, we already have a number of other products in development to meet the needs of different parts of the carbon value chain,” Eckert said.

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Lockton Re Capital Markets (LRCM) has announced the appointment of Brendan Roche as its new head of distribution.

Roche’s career includes tenures as an SVP at GC Securities and nearly 14 years at Marsh, where he held the position of global leader of ILS and SPV Centre of Excellence. His experience also spans various roles within hedge funds, investor, and financial sectors.

Roche, who has over 25 years of experience in the sector, will be reporting to Zach Breslin, the head of LRCM, and will be stationed in Europe.

Breslin shared his enthusiasm about the new addition to the team welcoming Roche as the firm seeks to enhance client services and offer solutions complementary to Lockton Re’s current portfolio.

“His depth of experience and excellent reputation are a great fit for our growth and expansion, as we are strategically focused on investing in the right people to support our clients in accessing the most efficient forms of capital to fund their businesses,” Breslin said.

Robert Bisset, chairman Global Retrocession & Property Specialty, Bermuda & Market Capital, Lockton Re, highlighted Roche’s alignment with the company’s dynamic culture and client-focused approach.

“Brendan is a great fit for the dynamic culture of Lockton Re and our continued focus on clients and colleagues. It’s been an exciting journey since we launched LRCM; we have added colleagues, built infrastructure, and are now providing solutions across a broad spectrum of capital providers and product categories. I look forward to working with Brendan, as do the wider team,” Bisset said.

Roche’s appointment follows another recent hire for Lockton Re, with the broker unveiling an expansion to its cyber practice by naming Brian Lewis as senior broking leader for cyber in North America.

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Accidents relating to condiments can be quite common, a predicament that Heinz now aims to solve with its innovative insurance policy.

Heinz Arabia has unveiled a solution aimed at addressing the mishaps faced by ketchup enthusiasts – the introduction of the first-ever ketchup insurance policy.

This unique insurance offering is designed to mitigate the frustrations associated with ketchup spills, splatters, and stains, which Heinz touts as marking a significant step towards enhancing its customer experience.

According to Heinz Arabia, nearly half (48%) of its consumer base encounters ketchup-related accidents frequently, with a striking 91% affirming that the enjoyment of Heinz ketchup outweighs the potential mess.

In response, Heinz Arabia, in collaboration with a leading employee benefits app, has introduced a pioneering ketchup insurance policy that accommodates 57 distinct claims, addressing a wide range of ketchup mishaps.

Claims for ketchup-related mishaps

The policy’s official site lists these 57 damage descriptions, which Heinz says can be eligible for a claim. Some of the more distinct ones include:

• The Mega-Squeeze – the claimant attempts a mega-squeeze of Heinz ketchup, causing ketchup to disperse in all directions
• Heinz Sight – the claimant attempts to squeeze the bottle with a loose nozzle, causing temporary vision impairment
• Error 57 – the claimant spills ketchup upon their computer and/or computer equipment, impairing its function
• Young Picasso – the claimant’s young offspring use the ketchup for artistic purposes, resulting in a messy masterpiece
• Murphy’s Law – the claimant’s ketchup spill beats all the odds, and lands on the only white section of the affected object

Heinz says that this initiative was inspired by numerous social media postings depicting various ketchup spills and accidents. As a result, the company has formulated a comprehensive insurance package, covering an array of incidents from stains on carpets and clothing to unexpected splatters on pets, ceilings, and furniture. The policy is crafted to offer quick and straightforward compensation for those affected.

For residents in the UAE, the insurance policy enables them to claim a variety of compensations through rewards such as home cleaning services, laundry support, handyman services, and even luxurious spa treatments. These benefits are accessible via MyBenefits, a premier employee benefits application in the Middle East.

Passant El Ghannam, head of marketing at Kraft Heinz MEA, commented on the initiative.

“Here at Heinz, we recognize that our fans’ enthusiasm for our ketchup can occasionally lead to exuberant, albeit messy, situations. Our research indicates that 48% of them regularly deal with ketchup accidents, yet 91% assert that their love for Heinz justifies the occasional spill. This insight has motivated us to launch the ketchup insurance policy, transforming potentially frustrating moments into opportunities for delight and convenience, and allowing our avid consumers to relish their ketchup experiences without concern,” El Ghannam said.

Heinz Arabia encourages individuals who have encountered ketchup-related accidents that fall within the 57 covered claims to seek compensation. Claims can be filed through Heinz Arabia’s official website or social media platforms, utilising the hashtag #HeinzKetchupInsurance.

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This article was produced in partnership with Open GI.

Confronted with intense competition from innovative, technology-driven startups and growing consumer demands for seamless digital services, the traditionally conservative insurance sector has been actively pursuing digital transformation for several years. According to a Thomsons Reuters report Global insurance IT spending is expected to reach £287 billion by 2025.

Head of Digital Product, Paramjit Singh at Open GI -insurance software providers for brokers, MGAs and insurers – sees digital innovation as a vital component of the industry’s future. Singh’s attraction to Open GI was rooted in its commitment to change and innovation. He says, “”I was drawn to Open GI because of its commitment to undergoing significant change. The desire to be part of that transformative journey was a major deciding factor for me.”

The company’s suite of digital tools, from quote and buy solutions to self-service portals, is designed to streamline the purchasing journey, enhance customer service, and integrate seamlessly with aggregators and data enrichment services for better pricing insights.

Digital’s dual edge: opportunities and challenges

Digital technology offers a plethora of benefits, from operational efficiencies to improved customer engagement. Singh emphasizes that digital tools enable brokers to manage policies more effectively, offering a frictionless experience to customers akin to that of leading online services like banking apps, Uber, and Amazon. The demand clearly exists, survey by Capgemini shows over 75% of insurers plan to collaborate with insurance technology firms to enhance customer experiences. However, the journey is not without its challenges. The onset of the pandemic has not only expedited this shift but also highlighted the critical need for digital innovation, albeit in a more challenging environment, leaving many brokers playing catch-up. The industry’s traditionally slow pace in adopting new technology is now being tested by changing consumer behaviors and expectations.

Singh says, “Digital transformation is not just about technology; it’s about catering to changing consumer behaviors and expectations. The pandemic has significantly accelerated this shift, making digital adoption an imperative for brokers.”

Navigating customer expectations and security concerns

The Head of Digital Product points out that the digital shift is largely consumer-driven, with customers expecting quick, streamlined processes akin to those offered by other online services. This demand for speed and convenience is pushing brokers towards digital tools that can provide such experiences without sacrificing personal touch. Moreover, data security remains a paramount concern, with Singh highlighting the importance of encryption, regular security checks, and cybersecurity measures to protect against increasing threats.

Singh highlights that reluctance often stems from both cost considerations and a lack of understanding of the technology involved. While many are familiar with basic online shopping websites and portals, the challenge lies in leveraging these platforms further, such as harnessing data effectively and adopting an omnichannel strategy, which includes integrating live chat and AI virtual assistants. This approach aims to provide a seamless experience, where customers don’t need to repeat information across different channels, from online to phone communication.

He notes, “The conversation around AI and machine learning is pervasive, yet there’s a gap in comprehending its practical benefits. Diving into AI without a solid foundation can be premature. A customer-centric strategy is essential, paving the way for advanced systems like those powered by natural language processing (NLP). These technologies enable assistants to understand and mimic human conversation, offering diverse applications, from online customer support to streamlining tasks.”

Integrating such AI capabilities can also enhance telephone services, potentially reducing call durations by handling preliminary inquiries through automated voice responses before connecting with a live agent. “Yes, there’s an initial outlay but it leads to cost efficiencies over time. By shortening calls, call center staff can be redirected to other valuable activities, optimizing their roles,” he further details.

Future direction and forward thinking

To gauge the success of digital initiatives, Singh suggests monitoring key performance indicators (KPIs) such as adoption rates, customer satisfaction, operational efficiencies, and conversion rates. These metrics can offer valuable insights into the effectiveness of digital tools and areas for improvement. Looking ahead, Open GI aims to further enhance its digital offerings by exploring new technologies and gathering feedback from brokers to address the industry’s most pressing challenges.

Providing tangible benefits, such as cost savings, is key since that’s a primary concern for brokers. These savings then contribute to better conversion rates, indicating the efficiency of policy renewals or updates. Analyzing conversion rates and instances of abandonment allows for the optimization of customer journeys.

The goal is to enhance and expand digital services by building upon existing products and incorporating new technologies, with a focus on integrating insights from brokers. This approach helps in understanding the challenges brokers face, particularly with time-consuming repetitive tasks, and in developing solutions tailored to address these issues effectively.

Open GI is set on preserving the invaluable role of insurance brokers rather than bypassing them with digital sales methods. The company understands that the personal touch provided by agents, through one-on-one interactions, remains irreplaceable. Such interactions, where an agent can directly address a client’s personal circumstances—like the well-being of their children in unforeseen events—highlight the importance of human connection in insurance sales.

Despite this, Open GI acknowledges the growing demand for digital innovations in the marketplace. These digital processes are not intended to supplant personal interactions but to augment the efficiency of agents. The goal is to streamline sales and administrative tasks, ensuring that paperwork, which previously could consume an entire day for a client, can be completed more swiftly and efficiently. This approach reflects a balance between leveraging technology to enhance operational efficiency and maintaining the personal advisor-client relationship that is central to the insurance industry.