The private market for credit and political risk insurance has been profitable over the long term, and there is still significant potential for growth. To achieve this growth, the market must improve support from key stakeholders such as governments, gain more trust from these stakeholders, and invest in training to reduce reputational risks. Additionally, increasing the diversity of supply and better addressing crisis can also help the market reach a higher potential and better penetration.
During the ExCred International 2023 conference in London, a round table raised the issue: “Can the private market reach a higher potential?” Here are the inputs brought by Tinubu during this session.
Improve key stakeholders support
One way to improve support from key stakeholders is to increase transparency and communication. The market must work to educate governments about the value of credit and political risk insurance and the ways in which it can benefit businesses and economies. It is important to provide regular updates on market trends and developments and to work collaboratively with these stakeholders to address any concerns or issues that arise. Another way to gain more trust from governments and reinsurers is to establish robust risk management practices. This includes conducting thorough due diligence on potential insureds and developing strong underwriting processes to ensure that policies are appropriately priced and structured. Additionally, insurersand brokers must work to establish strong relationships with reinsurers to ensure that adequate reinsurance capacity is available even during times of economic uncertainty.
Better manage crisis
During a crisis, the market must be transparent and proactive in addressing issues as they arise. This includes developing clear communication strategies and working collaboratively with stakeholders to address any concerns or issues that may arise. Governments felt the need to step in at the outset of Covid due to the unprecedented nature of the pandemic and its impact on businesses and economies. However, the private market can gain more trust from governments by demonstrating its ability to provide support during times of crisis. This includes developing products and solutions that address the unique risks and challenges faced by businesses during a crisis, and working collaboratively with governments to ensure that businesses have the support they need to weather the storm.
Improve the brand image
To improve the brand image with key influencers, the insurers must work to develop strong relationships with brokers and clients, and to communicate effectively about the value of credit and political risk insurance. This includes developing thought leadership content and engaging in industry events and conferences to increase visibility and establish credibility.
Improve the offer
Increasing the diversity of supply through new entrants can also help the market reach a higher potential and better penetration. This can help to drive innovation and provide businesses with greater choice and flexibility in selecting insurance products and services.
Reduce reputational risks
Finally, investing in training to reduce reputational risks can help the market to build trust and establish strong relationships with stakeholders. This includes providing regular training and education to employees and brokers to ensure that they understand the importance of risk management and the value of credit and political risk insurance. In conclusion, there are a variety of ways in which the private market for credit and political risk insurance can reach a higher potential. By improving support from key stakeholders, gaining more trust, investing in training, and addressing crises optimally, the market can continue to grow and provide businesses with the support they need to succeed in today's global economy.
A white paper to ask yourself the right question: "should you build your own credit insurance management system or buy an off-the-shelf solution?"