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Risk Insurability Analysis

By conducting an analysis of your risk profile to identify what is insurable, partially insurable and non-insurable, you can gain vital insights needed to make well-informed risk transfer and mitigation decisions.

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Integrated

Breaks down silos between enterprise risk management and insurance functions.

Insightful

Empowers informed decision-making on minimizing risk exposures.

Bespoke

A tailored solution to manage risks and develop insurance strategies effectively.

Does your enterprise risk management approach align your organisational strategies with insurance activities?

Facing increasingly complex, interconnected, and unpredictable risks in Asia and beyond, companies that fail to align their risk profiles with their organisational strategies and insurance activities, as part of their overall enterprise risk management (ERM), may be more vulnerable to strategic, operational, technological, regulatory and financial impacts when a risk event occurs. 

A robust risk analysis should not only uncover key risks as part of an organization-wide enterprise risk assessment, but it must also be able to classify the risks as insurable or non-insurable so that the right follow-up actions can be calibrated with strategies.

Marsh’s Risk Insurability Analysis is an effort that provides such visibility and appropriate recommendations for your company to mitigate and transfer risks. 

The analysis also reviews and ensures the adequacy of your existing insurance programs to help you avoid overinsurance — excess expenditure on insurance coverage — and underinsurance — a gap in insurance coverage that exposes your company to potential significant financial losses from adverse events and heightened by trends such as inflation, rising interest rates, and supply chain disruptions. 

How the Risk Insurability Analysis works

Marsh’s Risk Insurability Analysis synergises your enterprise risk management and insurance management by helping you to:

  • Identify and quantify key risk profiles in a structured manner.
  • Assess the insurability of your risk exposures.
  • Identify and close your insurance coverage gaps.
  • Optimise your risk mitigation efforts.

Understanding that speed and efficiency is essential, Marsh leverages its combined risk and insurance advisory expertise and resources in conducting the Risk Insurability Analysis for your company, with the steps and key outcomes below:

Figure 1 - Risk Insurability Analysis

How are insurable and non-insurable risks treated?

Insurable risks are within the insurers’ risk appetite with typically ample underwriting capacity while partially insurable risks may require layering of coverage. Business continuity risk, for instance, is an insurable risk that may be covered by a Property Damage and Business Interruption (PDBI) policy with a specific maximum indemnity period.

As part of the Risk Insurability Analysis, Marsh will compare insurable and partially-insurable risks with your existing insurance coverage, and provide recommendations to optimise your insurance solutions.

Non-insurable risks cannot be transferred because insurers are unable or unwilling to underwrite the risk. Hence, companies need to mitigate these risks with a robust system of internal controls and loss measures to adequately prevent, detect, and/or respond to non-insurable risk events.

As part of the Risk Insurability Analysis, Marsh can assess the operational and financial impacts of non-insurable risks on your organisation and recommend strategies – such as crisis management and business continuity planning for pandemic risk – to contain the risk exposures based on best practices.

Why Marsh?

Conducted by Marsh Advisory Strategic Risk Consulting team, the Risk Insurability Analysis takes into consideration your risk appetite and tolerance, as well an evaluation of your existing insurance programs, to ensure that recommendations are tailored to your business. Our integrated approach helps your risk managers and business leaders enhance your company’s existing insurance programs and risk mitigation strategies.

Marsh Advisory is dedicated to providing best-in-class services to optimise the effectiveness and cost-efficiencies of your ERM and insurance strategies amid an evolving risk landscape.

Explore how Risk Insurability Analysis can improve your enterprise risk management outcomes. Get in touch with a Marsh representative for a free, non-obligatory discussion today.

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FAQs

As a vital part of the risk management process, Risk Insurability Analysis uncovers gaps between ERM and insurance activities, including both insurable and non-insurable risks. These identified exposures can then be matched with the appropriate risk mitigation or transfer solutions to enhance overall organisational resilience. The Risk Insurability Analysis also enhances your business insurance coverage by optimising your total cost of risk.

We offer various scopes and depths of analysis, and the engagement timeline may range from 6 to 18 weeks. The analysis can also tailor to the needs of your organisation.

The cost is dependent on the scope, breadth and coverage of your organisation. Please get in touch with us for a no-obligation consultation to better understand your company’s needs so we can advise accordingly.

Our people

Peter Johnson

Peter Johnson

Asia Leader, Marsh Advisory