Hitting the Curve Balls

Where do you see emerging threats coming from on the cyber landscape, and how are you preparing to ensure clients are properly covered for these risks?

AGCS sees a strong and steady demand for cyber insurance, as both cyber risk and claims are rising; we reached a peak of 1,000 cyber claims in 2020, globally. The continued increase in ransomware attacks is also concerning.

We take a prudent underwriting approach to ensure that we are a sustainable partner for our clients in the long term rather than just focusing on volume in the short term. Assessing each risk individually, we put much emphasis on a firm’s IT maturity.

In addition, we are constantly boosting our capabilities to understand evolving cyber threats to spot new trends early on to better serve our clients. For example, we are collaborating with partners such as Google to gather more meaningful data around cloud cyber security and to meet our insureds where they are and where they are going. This is increasingly important as more companies accelerate their migration to the cloud.

Expectations for organizational performance in the realm of ESG (environmental, social, governance) are growing, including reporting requirements for them. How is Allianz addressing ESG in terms of underwriting and investment decisions?

ESG has become a top priority both for Allianz as a financial institution and our clients who have to manage and respond to a growing range of ESG trends, including climate change and pollution, diversity and inclusion, and new transparency requirements.

As a core part of our ESG commitment, Allianz aims to drive the transition toward a low-carbon economy, which is also part of our role as one of the founding members of the new United Nations Net-Zero Insurance Alliance. This fundamental change can only be achieved gradually and together. We also support insurance products and investments designed for wind and solar energy as well as the emerging global hydrogen industry.

What is the role of alternative risk transfer solutions in helping to create sustainable pricing and a stable market for complex, systemic risk?

In the current market cycle, we are seeing an increased appetite for alternative risk transfer (ART) solutions. Many businesses today are forced to retain more risk or must look for alternatives for existing covers that are now much more expensive or are no longer offered by the markets. ART solutions, such as structured solutions or captive fronting, do not undercut traditional risk transfer in property and casualty. They are complementary.

We already saw increasing interest in ART solutions before the pandemic, and this trend has further accelerated in 2021. Regardless of the favorable market cycle, it takes capital, competencies and capabilities to establish and run ART solutions. It’s a long-term strategic decision.

As the insurance industry increasingly digitizes and makes use of complex data, how is your talent strategy changing?

Data and analytics are of vital importance for AGCS’s success and for supporting our global clients. We are already using data in all aspects of our day-to-day business—from underwriting and data modeling to claims settlements via predictive analytics. All these developments have an impact on the type of roles we offer and the diverse skill sets we are looking for.

Like anything else, our talent strategy must keep up with market trends. We have found that utilizing niche candidate networks, such as the Women in Data Science (WiDS) initiative, The Casualty Actuarial Society, and the National African-American Insurance Association, is a great way to engage and attract new talent with the digital background needed in today’s environment.

What are some lessons learned from the pandemic relative to a leadership standpoint? And how about an industry standpoint—will we be prepared for the next one?

AGCS, together with Allianz Group, is incorporating lessons learned over the past year into a new global framework called “The New Ways of Working.” This includes offering a hybrid work approach with more flexibility, providing a global health framework to support our employees’ overall well-being, and supporting their professional development through continuous learning opportunities.

Having said that, simply put, we will always do what is in the best interest of our employees’ health and safety. We have come so far these past 19 months, and it is critical that we do not let our guard down.