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Active risk management in the company

The challenges in the property insurance market are increasing. Insurers are reacting with higher premiums and restrictions on some coverage elements. They also require companies to have comprehensive risk management. deas supports customers in establishing and reviewing fire protection concepts, in risk prevention and in active risk management.

Challenges

Along with the changed conditions, the demands of the insurers on their customers are increasing – particularly in the area of fire protection, risk prevention and active risk management. If the policyholders cannot meet these demands, the insurers react by significantly raising the deductibles, reducing their commitment or even withdrawing from the contract. And requests for new commitments are often rejected by the risk carriers on the grounds that the fire protection measures are not commensurate with the risk.

The resulting higher premiums mean that a greater share of the risk has to be borne by the policyholder and that investments have to be made to minimize the risk. These demands come at an extremely inopportune time, as companies are currently facing a difficult overall economic situation with costs rising elsewhere and demand falling in many areas. So now they are also faced with the challenge of establishing an active risk management system or reviewing the existing one.

The goal: loss minimization

A look at the interests involved reveals parallels: insurers focus on existing risks and how to deal with them preventively in order to offer insurance cover on this basis – and if damage does occur, the extent of the damage should be kept as manageable as possible. Companies have the same interest. After all, damage would mean that the affected company would come to a standstill, its production and delivery capabilities would be restricted, and the company would face an uncertain future. Major damage is always accompanied by a loss of market share and a negative reputation among customers, suppliers, current and potential employees. Whether this situation returns to normal after the restoration and the temporary settlement of the damage by the insurers is initially questionable for each damage. In some cases, the future of the affected companies is at stake.

deas fire protection engineers identify and assess risks

The experts at deas advise companies on active risk management and prevention. A team of insurance experts and fire protection engineers prepare the customers for the inspections with the insurers. The fire protection engineers not only contribute their technical expertise, but they also often know the internal requirements of the risk carriers. Coupled with the ability to think outside the box rather than just sticking to well-trodden paths, the deas experts are able to identify the main areas of interest for the insurers at a very early stage and respond to them in close consultation with the companies. This active preparatory work puts companies in a better position when negotiating with the insurance companies.

BILD

Together on site with the customer: Lukas Hager, Risk Consultant at deas, Julian Szymoniak, Technical Insurance Expert at Ecclesia Construction and Thomas Hergarten, Head of Property Insurance at deas.

Implementation of the requirements of authorities and risk carriers

But where do the differences between the ideas of the risk carriers and the legal or official requirements for risk prevention come from? And why do insurers usually have additional requirements? The requirements of the authorities primarily take into account personal protection and environmental protection. The protection of property, which the insurers primarily consider from their perspective, takes a back seat in the building regulations, the design of escape and rescue routes and other aspects. The continuation of operations and the ability of the respective companies to deliver are also not covered by the official requirements.

An active approach is the best way forward

In practice, it has been shown that it is advantageous for companies to address the issue of operational safety themselves and thus to practice active risk management, rather than just reacting to the demands of the insurers, which may vary if the risk carrier changes. deas advises companies on this in a very targeted manner and accompanies them through the individual process steps.

Checklist

The following questions and aspects must be considered and implemented in each case when setting up an active risk management system.

What is the protection goal to be achieved and is there agreement on this?
In which areas of the company are there main hazards that could result in damage? Can the risk be minimized there? If so, how?
Are there bottleneck machines or key processes that would have a major impact on the entire company if they failed?
What measures can be taken to minimize these risks?
What minimum safety standard should be agreed for each individual company site or the respective operating areas?
How much time should be allowed for implementation and what financial resources should be earmarked for this?

Involving deas at an early stage

In new construction or renovation projects, it is certainly easier and cheaper to implement these aspects than it is when making changes to existing buildings. The earlier deas is involved, the better the planned measures can be coordinated with the insurers, but also the better it is for implementing changes to the concept that ideally do not exceed the set financial framework. This way, viable and long-term solutions can be developed with the transparent involvement of all parties.

For existing properties, changes can usually only be implemented in the long term and sometimes at a greater financial cost. The deas engineering team always tries to develop practical solutions for the particular situation at hand. Before such proposals can be drawn up, a comprehensive analysis of the respective risk situation on site is required in order to assess the necessities and possibilities.

When implementing these measures, there are many individual alternatives available to prevent damage from occurring or, if damage has occurred, to ensure that the effects can be kept within certain limits. A decision to implement should always be accompanied by a time frame. It should be noted that certain measures can only be carried out when the company is closed. Insurers are also aware of these conditions and certainly do not expect any immediate action to be taken. However, the seriousness of the project should be recognizable within the time frame.

Creating a solid basis

Together with the companies, the deas team presents these prevention activities to the risk carriers. This proactive approach very often succeeds in convincing the insurers of the overall concept of the measures and the time frame. The deas experts keep an eye on the implementation milestones together with the companies and can quickly communicate with the insurer in the event of deviations, thus ensuring transparency.

This structured approach ensures that the companies' concerns regarding operational reliability and delivery capability are met. In addition, the requirements of the insurers with regard to risk prevention are taken into account.

If you, too, would like to put your individual risk situation to the test and position yourself securely for the future, deas will be happy to advise you at any time on analysis and implementation.