The Covid-19 pandemic has revealed the strengths and weaknesses of third-party relationships, according to a panel of leading risk executives.
Participants on day five of PARIMA’s Resilience Week said the global health crisis had underlined the importance of strong network relationships with insurers, brokers and other third parties.
Maggie Sun, regional risk manager at Cummins Inc, based in China, said her company had worked closely with brokers and loss adjusters to claim against a communicable disease extension in its insurance coverage as the pandemic hit.
“We were lucky and had very solid supportive information and had a supportive case,” she said.
Sun said her business had been forced to fight for a pay out from its insurer.
“In this case, we’re yet to be paid or compensated by the insurance company… So that is a lesson learned, that we cannot have the coverage as granted.”
“During our renewal cycle, we were told by our insurance carrier that we could not have that extension anymore,” she added. “So right now, we don’t have anything getting covered or disease-related in our programme.”
“So that is one of the lessons learned, that it’s not only about the transfer of risk into the commercial insurance market. We’re seeing that we need to build out our internal risk resilience and our internal risk mitigation programme.”
Stacey Huang, executive director at PARIMA, said the pandemic showed that risk managers needed to look at the “prescriptive” elements of their insurance arrangements.
“It’s really about rethinking or questioning whether our internal coverage and protection is sufficient. Do we have to go down into being quite prescriptive in terms of what we cover versus what we do not cover? That’s a huge lesson,” Huang added.
Huang noted a key lesson from earlier in the PARIMA conference.
“You really can tell who your partner is, and who isn’t. So, a call to action is, go out there and strengthen your network, go out there and make relationships, especially if it’s hard, or especially if it’s not face-to-face, because you never know when you need to draw on them.”
Anisha Udeshi, director of global insurance and risk at Cipla, agreed that relationships were important.
“I would say that a very apt observation; that you only get to test your networking abilities and expertise at the time of crisis.”
Blog: PARIMA Resilience Week 2021 Daily News Summary
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PARIMA Resilience Week: Pandemic highlights strength of third-party relationships