Herman Kerremans, CEO of Howden Belgium, has urged insurers to show some empathy
with clients at upcoming renewals, as he predicted the market will continue to harden for a
few more years.

Speaking at Commercial Risk Europe’s Risk Frontiers event in Antwerp this week, held in
association with the Belgian and Dutch risk management associations Belrim and Narim,
Kerremans said: “I am convinced that the hard market is going to stay with us for another
two, maybe three, years.”

So, he called on insurers to consider their clients in Belgium and across Europe at end-ofyear
renewals and beyond.
“I am still trying to figure out whether empathy exists in business. But I know insurers are
coming up with quotes in mid-December and they must bear in mind that buyers are
negotiating with maybe ten or 15 parties and cannot wait until 15 December to get a quote
in. I would call on insurers to keep that in mind and show some empathy, because it is
really a tough and hard market,” said Kerremans.

But he reassured risk managers gathered at the event that the soft market will return and
the hard environment won’t last any longer than previous cycles, as some have predicted.
“I have seen this for 35 years and the market goes up and it goes down. It will not be
harder this time for longer than it was in previous cycles. It will come back to softening
because there is already now a kind of softening in some lines, some other lines are
plateauing and still some are firming. It will change at some point because there will, and
already is, new blood coming into the market and some will be opportunistic,” said the
broker, at the conference sponsored by AIG, Aon, Chubb, CMS and Howden.

President of Belrim Gaëtan Lefèvre said the commercial insurance market remains difficult
for his members. He too noted that that they are finding it very difficult to develop
partnerships with insurers when quotes are coming in so late in the day. Partnership means
a balanced solution, he reminded carriers.

Lefèvre said buyers need strong negotiating skills to navigate the hard market and, crucially,
must know there organisation inside out so they are well prepared for discussions. “You
need to sell your risk and if you don’t know how your company is working, you are in
trouble,” he said.

This means risk managers must be involved in lots of their organisations’ processes, he
added. Insurance buyers also need to work with their brokers to collect as much data as
possible and put it to market in an acceptable form, continued the expert, who is also head
of ethics, risk and insurance management at John Cockerill. In addition, it is vital that risk
managers can think outside of the box and take a long-term view, said the Belrim president.

But ultimately, risk managers need to go back to basics in the hard market, focus on
prevention and manage their risks internally, added Lefèvre.
He stressed that hard markets require buyers to properly focus on exactly what risks they
need to transfer and what they can retain within the business.

Fellow panel member Oliver Schofield, managing partner at captive and alternative risk
transfer expert RISCS, advised risk managers to revisit their insurance programmes and
work out exactly what they do or don’t need to stave off the worst hard-market impacts.

“As the market turns, look very carefully at what you are buying because there will be things
in your policy that were probably given away in the soft market that are going to be charged
for in a hard market, and you might not actually need in your policy. This not only applies to
breadth of cover but also the limits. Do you really need to buy that extra £50m on top of the
£500m tower? And then look at the sublimits as well. Are they absolutely meeting your
worst-case scenario from a loss point of view? The brokers and the underwriters should
work with the risk managers to do a full vetting of the policy, to get the deal that works for
everybody,” he said.

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