993 Advances in Strategic Risk Management in Insurance Assignment 2, 2026

993 Advances in Strategic Risk Management in Insurance Assignment 2

Background

Insurers increasingly recognise that understanding customers’ needs and effectively engaging with them is crucial to long-term business success.

For example, Aviva plc recognises it is on a customer engagement journey as stated in its 2023 Report and Accounts:

>Our strategy is centred around our customers. And we’re only getting started. The better we understand what customers need, the better we can help them make things click.’

Source: Aviva plc, Annual Report and Accounts 2023. Available at: https://static.aviva.io/content/dam/aviva-corporate/documents/investors/pdfs/reports/2023/aviva-plc-annual-report-and-accounts-2023.pdf [Accessed 1 January 2025].

One customer need, that Deloitte’s have identified, is the prevention of losses:

>Most insurers are realizing that reacting to risks may not be good enough and are undertaking transformation efforts aimed at preventing losses from happening in the first place.’

Source: Deloitte, 2024 global insurance outlook. Available at: https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html [Accessed 1 January 2025].

Whilst the commercial insurers sector has long recognised the role that risk reduction services for customers can have, the same is far less evident in the personal lines marketplace.

By way of example of the approach taken by insurers of personal lines, the customer focus of Admiral Group plc states:

We provide a broad range of insurance and lending products to meet our customers’ specific needs, enabling more people to look after their future.

We engage closely with our customers throughout the claims process, ensuring they are supported and receive a fair outcome in a timely manner.’

Source: Admiral Group plc, Annual Report and Accounts 2023. Available at: https://admiralgroup.co.uk/static-files/6d6c4471-0872-4f63-9bf6-52f3cc3cbabd [Accessed 1 January 2025].

To move from a personal lines business model built around insurance quotations, renewals and claims handling, to one that works with customers to improve their risk profile, will require a significant change in both strategy and culture.

Question

Analyse the extent to which the strategic and cultural capabilities of those insurers who transact personal lines insurance, equip their boards and senior management teams, to adapt their business models to address proactive loss prevention.