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Risk Insurability Analysis

By conducting an analysis of your risk profile to identify what is insurable, partially insurable and non-insurable, you can gain vital insights needed to make well-informed risk transfer and mitigation decisions.

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How to align insurance strategies with key risks through enterprise risk management (ERM ) framework? 

Risk environment in Asia is becoming more complex, interconnected, and unpredictable. Companies that don't align their insurance plans with their key risk profiles as part of their enterprise risk management (ERM) may be more vulnerable to significant adverse impacts —such as affected operations or finances — when a risk event occurs. 

A robust risk analysis should not only uncover key risks as part of an organisation-wide ERM, but it must also be able to unveil the risks as insurable or non-insurable so that follow-up actions can be calibrated with adequate risk transfer strategies.

Marsh’s Risk Insurability Analysis offers valuable insights and tailored recommendations to help your company identify, mitigate, and transfer risks effectively. 

This analysis not only identifies your organisation’s main risks and checks if they can be insured, but it can also review current insurance plans to see if they provide enough coverage. This helps you find any gaps that could lead to big financial losses if something goes wrong, especially with recent issues like inflation, higher interest rates, and supply-chain disruptions.

How our Risk Insurability Analysis works

Marsh’s Risk Insurability Analysis synergises your enterprise risk management and insurance management by helping you to:

  • Identify and quantify key risk profiles in a structured manner.
  • Assess the insurability of your risk exposures.
  • Identify and close your insurance coverage gaps.
  • Optimise your risk mitigation efforts.

Understanding that speed and efficiency is essential, Marsh leverages its combined risk and insurance advisory expertise and resources in conducting the Risk Insurability Analysis for your company, with the steps and key outcomes below:

Figure 1 - Risk Insurability Analysis

How are insurable and non-insurable risks treated?

Insurable or partially insurable risks

Insurable risks are within the insurers’ risk appetite with typically ample underwriting capacity while partially insurable risks may require layering of coverage. Business continuity risk, for instance, is an insurable risk that may be covered by a Property Damage and Business Interruption (PDBI) policy with a specific maximum indemnity period.

As part of the Risk Insurability Analysis, Marsh can compare insurable and partially insurable risks with your existing insurance coverage and provide recommendations to improve your risk transfer strategies.

Non-insurable Risks

Non-insurable risks cannot be transferred because insurers are unable or unwilling to underwrite the risk. Hence, companies need to mitigate these risks with a robust system of internal controls and loss measures to adequately prevent, detect, and/or respond to non-insurable risk events.

As part of the analysis, Marsh will provide qualitative and quantitative impact assessments of non-insurable risks to your organisation and recommend risk management strategies – such as risk mitigation developments, crisis management, or business continuity planning – to improve your organisational resilience.

Case study

A leading Thai multinational with core operations in hospitality, food and beverage (F&B), and lifestyle brand distribution sought an independent review of enterprise risks across its businesses. The objective was to validate its existing risk profile and identify potential gaps in insurance coverage.

Marsh analysed the client’s risk landscape across three business areas, using industry data and trends to provide an outlook . We compared their risks with three similar companies to benchmark their position.

Our review identified several areas to improve the client’s risk profile and better address emerging threats. We provided an updated enterprise risk profile, evaluated insurability, and recommended insurance solutions for uninsured risks.

Through this engagement, the client gained:

  • An independent analysis of key risks and mitigation compared to industry peers.
  • Insights into industry-specific risks for future assessments.
  • An updated enterprise risk profile at a strategic level. 
  • Identification of insurable risk gaps and insurance recommendations for uninsured risks.

Why work with Marsh Asia?

  • Asia-specific experience: With 70 years of experience in Asia, we are well-equipped to evaluate your risk management approach.
  • Integrated approach: We link risk and insurance insights to align your risk management and financing strategies.
  • Diverse and multidisciplinary expertise: Our approach empowers managers and business leaders to optimise your company’s current insurance programs and make informed decisions regarding risk mitigation strategies.

Ensure your insurance strategies align with your organisational key risks and priorities. Get in touch with a Marsh Asia risk advisor for a discussion today.

FAQs

Why do I need Risk Insurability Analysis when I already have insurance coverage?

As a vital part of the risk management process, Risk Insurability Analysis uncovers gaps between ERM and insurance activities, including both insurable and non-insurable risks. These identified exposures can then be matched with the appropriate risk mitigation or transfer solutions to enhance overall organisational resilience. The Risk Insurability Analysis also enhances your business insurance coverage by optimising your total cost of risk.

How long does it take to conduct a Risk Insurability Analysis?

We offer various scopes and depths of analysis, and the engagement timeline may range from 6 to 12 weeks. The analysis can also tailor to the needs of your organisation.

How much does Risk Insurability Analysis cost for my company?

The cost is dependent on the scope, breadth and coverage of your organisation. Please get in touch with us for a no-obligation consultation to better understand your company’s needs so we can advise accordingly.

Our people

Peter Johnson

Peter Johnson

Asia Leader, Marsh Advisory

Derek Taylor

Derek Taylor

Head of Strategic Risk Consulting

Nicky Liu

Nicky Liu

Enterprise Risk Management Practice Leader, Strategic Risk Consulting, Asia