The president and CEO of Marsh has said that insurers must focus on innovation and better supporting risk managers as the risk environment becomes ever more complex.

CEO of broking giant Marsh, Martin South, was speaking as the Airmic annual conference opened in Edinburgh where he took part in the opening session and was asked about how risk managers are faring at present.

“We need to support the changes needed in the risk management role,” he explained.

Marsh Airmic

“There is an opportunity for the risk management industry to be the voice in the C suite which can marshal the risk understanding and what is happening to ensure that they can bring emerging risks to the attention of the boardroom.”

He added: “You can see from the people who are here today that they know the role they play, and we need to support them with the right answers to questions and the right [policy solutions.”

However, when it came to what the market offers and its ability to innovate in the face of changing risks South was less positive.

“When you look at where we stand, with the exception of say cyber cover which is fairly new, the products that the industry offers have not changed since the world industrialised, but the risk are different.”

South added: “Take supply chain risk. We all know the pressure which has been placed on supply chains in recent times.

“However, if you look at what we offer there is contingent BI, which some insurers have been seeking to scale back over concerns around exposures. There is trade credit, stock throughput has been a topic of discussion and there is some degree of cyber but that goes down one or two levels at best”.

“What need to happen is for the industry to really get into the deep layers and understand those risks, using real data and analytics,” said South.

“It would give insurers the chance to adjust their products, and that might include some catastrophic risks if they can be understood. I appreciate it is like with the catastrophic risks there will need to be public private solution, but they need to be understood.”

He said in some respects he felt there was still a degree of “Venus and Mars” in the approach between market participants but added that the issue could be overcome with more open conversations.

“When it comes to innovation, I am not sure of our performance and I would give it a C plus,” he added. “However, I am optimistic there are thing we can do.”