The financial lines marketplace in Europe is dynamic and fast-changing. In the latest of a series of interviews with underwriting leaders and country leaders, Simona Fumagalli, Chief Underwriting Officer, Financial Lines – APAC & Europe, and Bruno Laval, Chief Distribution Officer – APAC & Europe and Regional Manager – European Markets, discuss the challenges faced by clients and why continuing dialogue is so important to managing and transferring these evolving risks.
Simona, you were appointed Chief Underwriting Officer, Financial Lines, APAC & Europe, last year. Can you tell us about your role?
Simona Fumagalli: I have spent many years working in financial lines. It is a fascinating and ever-changing area of the insurance marketplace, especially so these last few years. In my current role, I am responsible for developing underwriting strategies and product offerings for our clients across Europe and in the Asia-Pacific region.
Although we are a global company, with access to networks and underwriting expertise across the world, we remain focused on the local level and offer solutions that are relevant to our clients in their market. Having experts on the ground means we understand local cultures and ways of doing business.
I am based in Milan and we have specialised underwriters across the APAC and Europe Business Unit, in thirteen countries, who have both a deep knowledge of their local markets as well as the wider global marketplace.
What are the current trends in financial lines?
Simona Fumagalli: The financial lines marketplace is very dynamic, and things are changing rapidly. At the moment, conditions are challenging for many clients. Across the market, capacity has been restricted, or withdrawn in some areas, because of the global economic slowdown and there has been an uptick in both the frequency and severity of claims.
To take Directors and Officers coverage as an example, there has been a spike in claims across the industry in recent months – notably in the large corporate segment – driven by factors including regulatory activity, 3rd party litigation funding, collective redress mechanisms in the EU, and threats associated with economic recession. This is just one area where the financial lines market has seen big changes.
That’s why it is so important for us to have continuous engagement with our brokers to be able to work together to find the best solutions for clients as this line of business evolves. Collaboration is key. Early and transparent communication is really important to enable us to understand our clients’ risk profiles and provide the most effective risk transfer solutions for their changing needs.
Having experts across Europe, Asia and Australia is vital – our underwriters are able to understand and work with their clients, while also leveraging our global networks and expertise.
What are the cyber challenges for clients in Europe and Asia-Pacific currently?
Simona Fumagalli: The cyber insurance marketplace is constantly evolving. Against the backdrop of the global COVID-19 pandemic, there has been a rise in the number of attacks in Europe and across the world. This has been driven partly because of an increase in phishing attempts taking advantage of people’s fears and concerns about the pandemic, and partly because of the increased number of people working remotely; this has exposed gaps in some companies’ cyber defences. We have been working with our clients to help them assess, manage, and transfer these risks.
This is an area of business that is changing all the time as the threat evolves and the ways to manage and transfer risks adapt too. An ongoing dialogue with brokers and clients is – again – hugely important to help us understand the shifting risk picture and to work with our customers to structure the most suitable coverages.
Why is it important to have local underwriting capabilities in Europe and Asia-pacific?
Bruno Laval: For many of our financial lines clients, the last two years have been challenging. As Simona has mentioned, it’s a dynamic marketplace and the COVID-19 pandemic has added to an already changing picture.
That makes it all the more important to focus on having great communication with our clients and brokers. Having experts across Europe, Asia and Australia is a vital part of this – our underwriters are able to understand and work with their clients, while also leveraging our global networks and expertise to ensure they have access to the most suitable coverage to transfer their risks, whether it’s a local solution or part of a wider global insurance programme.
As we all look towards a recovery from the pandemic and its far-reaching effects, we will adapt to our new environment, and our local teams will continue to work closely with their brokers and clients to find solutions to their changing and often complex financial lines risks.
