Airmic 2026: Russell calls for new approach to uninsured balance sheet risks

Insurers and corporates need to work more closely together to develop new structures for complex balance sheet risks that remain uninsured.

The warning came from Suki Basi, managing director of specialty risk intelligence company Russell, who said demand was growing for more proactive and connected risk management strategies.

Speaking in Birmingham, Basi said risk managers, risk experts and insurers need to build strategies in partnership, as companies grapple with increasingly complex and connected exposures.

A cultural shift in risk transfer

“This year has seen a real step change in the way that senior executives from insurance companies and corporates view the complex world of specialty risk management,” he told StrategicRISK. “I think that we are at the start of a cultural shift in which insurers and corporates try to quantify more of their unprotected balance sheet risk. There is demand for a more proactive approach to connected risk management, which has been driven by Russell’s Connected Risk Group of corporate members.

“The Group boasts more than 30 members now, with a select group of them looking to advance at various degrees of speed towards the holy grail of an all-risk policy for business resilience that addresses their balance sheet exposure. The ART market is invested intellectually and committed to a degree that would have been unthinkable, 10 or even 5 years ago.”

He added: “It is why at Airmic this year we are having lots of conversation with underwriters and corporates, seeking to bring together the insurance market’s human intelligence with our specialty risk intelligence and scenario building capability to drive growth and opportunities for everyone in the value chain.”

Moving from concept to market design

Basi said the company held an event earlier this month in London involving six global corporates and a dozen alternative risk transfer (ART) specialist underwriters.

The group discussed how (re)insurers and corporates can move beyond traditional risk mitigation for balance sheet connected risks to an outcome-based solution.

Basi explained: “There is a growing consensus that more work needs to be done on building out from risk financing solutions into structures that develop into connected risk transfer solutions.

“Cyber was cited as an example of a market that had to be restructured and revised from its early days, into the model it has become today. In its early days the gap between clients’ expectations and the product on offer was huge. It is similar for the types of risks we are describing today, if everyone agrees to a fundamental restructure. What is needed is a major cultural shift in attitudes.”

Building the data to support change

He added: “There was broad agreement that it is now time for a collective agreement between insurers and corporates to engage in an industry data gathering exercise. More research is needed. The industry still faces the problem of the heterogeneity of the risks in these emerging markets, which serve to stifle innovation and any prospect of real change.

“One approach could be to focus on business models rather than industry types to help facilitate the cultural change that is required.”

David Broughton, who recently left Centrica to join Russell as a corporate consultant, added: “The global (re)insurance market and its corporate clients need to think of connected risk, particularly how it applies to non-damage business interruption cover, as a capital management solution, not just insurance.

“This is much more than a traditional multiyear multiline programme that focuses on the obvious property or casualty risks, but more those complex risks that fall into the 60%-80% of balance sheet risks that are uninsured. The next steps for the market going forward are to make progress to define risk appetite before it can be priced.”

The challenge now is whether insurers and corporates can turn that shared appetite into data, pricing and structures that work in practice.