broker of capacities. He is becoming a strategic partner who makes risks transparent
risks, calculates scenarios and develops sustainable solutions.
Risk Advisor: Rethinking risk consulting
broker of capacities. He is becoming a strategic partner who makes risks transparent
risks, calculates scenarios and develops sustainable solutions.
What will be expected of a risk advisor in the future?
Until now, the expectations were clear: placement: the risk advisor (RA) looks for the supposedly best risk carriers and prices and brokers these to their primary insurance or reinsurance clients (cedants) so that they are adequately covered in the event of a claim
.
In many cases, this service is no longer fully sufficient to manage the ever-increasing challenges for globally operating companies with or without a captive. For some of the risks, there is simply no longer any suitable protection at economically viable prices.
A satisfied customer needs an RA of the future in the role of a holistic consultant who also understands risks analytically/mathematically in order to develop customized holistic solutions. Since this type of risk transfer
or risk financing is often alternative and involves solution elements that involve a certain degree of complexity, the "after-sale service" plays a much more important role in the selection of a purely strategic RA, beyond the mere ability to place.
In addition, the market increasingly requires analytical and regulatory expertise. Capital management, emerging risks such as climate or cyber and reinsurers' expectations of robust models are forcing a higher analytical
standard. This is where the traditional role of the broker separates from the future role of the RA, who must cover capital optimization and scenario analyses in addition to risk transfer.
The change and expansion of the role to RA is, in our opinion, a necessary evolution that comes with exciting opportunities and creates new, deepening relationships to build joint resilience in a challenging environment where risk transfer and financing are becoming increasingly complex.
Why transfer existential risks?
Professional buyers of primary insurance and reinsurance usually feel that they are paying too high a price. Unfortunately, the simple question is not asked often enough: How much risk can I actually bear myself - as part of a deductible or an ownership vehicle (captive, etc.) - and how much risk do I need to transfer to third parties for reasons of capital efficiency? Reinsurance is essentially expensive capital, so its use must be consistently optimized.
This exercise of targeted risk allocation - as opposed to pure risk pricing - helps in most cases, supported by an individual strategy, to optimize the financial resources used to bear risk. A conscious retention strengthens risk awareness within the company, can improve profitability and make the potential loss manageable.
As a boutique broker, we cannot differentiate ourselves through size or global data pools, but we can through customer proximity, agility and the targeted use of technology.
Instead of cumbersome corporate structures, we rely on professional in-house developments: The development of our own specialized simulation software and modular tools create the necessary flexibility to make complexity manageable for the customer. In the future, supplementary AI approaches will be used where data quality and standardization allow - at the core, however, the combination of individual "craftsmanship" and modern technology remains the decisive
differentiating feature.
This creates a positioning as a strategic partner with measurable analytical expertise.
This is where the "sweet spot" approach developed by Ecclesia Re comes into play. The modeling software developed for this purpose is used to calculate various scenarios in order to find the optimum balance between retention and risk transfer. The aim is to deploy capital where it really counts: Protection only for losses that would be existential and could jeopardize equity.
Individual and aggregated risks are analyzed. With the help of actuarial methods - such as the combination of frequency and severity distributions and their stochastic simulation - it becomes clear which retention levels make economic sense in the long term. This is supplemented by benchmarking with market data in order to place the results in a realistic market and price context. This creates a well-founded picture of the "sweet spot" for the respective customer situation.
The idea of the total cost of risk (TCOR) is central to this: the decisive factor is not just the insurance premium, but the total costs of risk management - i.e. premiums, deductibles, administrative costs, etc. Example: A higher deductible lowers the premium, but increases the own burden in the event of a claim
and ties up capital. The optimum mix can only be found by looking at the overall cost picture.
The market is moving towards tailor-made programs instead of simply transferring the risk with existential consequences, leading in the long term to
capital efficiency, more stable finances and a targeted strengthening of resilience.
Why does a good after-sales service help to manage risks better?
Even the best analytics and the most efficient risk transfer/risk financing cannot prevent losses. The regular review of the analytical statements and measures taken and the review of risk transfer support the forward-looking management of losses and adverse developments.
Companies that actively manage risks recover more quickly after a loss and thus gain the trust of investors, suppliers and customers in the long term.
In addition, a good after-sales service enables ongoing data analysis after the conclusion of a contract, provides early warning systems for loss accumulations or
trend changes and creates the basis for preparing the next renewal with well-founded arguments. It strengthens the bond between the customer and
broker and ensures lasting trust through continuity.
Conclusio
The transformation from traditional broker to strategic advisor is the logical response to the complex challenges we face. We have chosen this path because we are convinced that it points to the future. The decisive factor is the combination of "craftsmanship", analytical depth and modern technology, which we use to create resilience and capital efficiency for our clients in a dynamic market environment.