How AXA XL are helping clients with their changing casualty risks

Authored by AXA XL Head of International Casualty Europe Mukadder Erdoenmez

In these extraordinary times, companies in all sorts of industries are doing extraordinary things; both to help the global effort to beat COVID-19 and to help to ensure their own survival.

As companies adapt – and adapt quickly – to meet the challenges posed by the global pandemic, their liability exposures are shifting. And the casualty insurance market is adapting too, to help clients survive this crisis and to enable them to change their own business models to help in the fight against the virus.

We are seeing fashion couture houses produce masks, robes and gloves for healthcare workers. Automotive manufacturers have changed production to make breathing apparatus for hospitals. Alcohol distilleries are producing hand sanitizer. Restaurants have transformed themselves and are delivering boxes of produce to customers’ doorsteps. And so on.

When companies change their core activity, their risks change too. On the property side, our Risk Engineering colleagues have been working tirelessly – and remotely – to help clients assess, manage and transfer some of the new risks created by changes in production or the way facilities are being used. Casualty exposures may also have altered as companies have switched to become part of an “emergency industry.”

We have been talking to clients in the automotive industry, for example, who are now producing ventilation systems. There are certain standards to which these systems must adhere for the protection of human life. There are, for example, several EU regulations that govern the manufacture, import and distribution of medical devices. This will mean that a client’s product liability exposure is different – the risks associated with a car are clearly not the same as those associated with breathing apparatus. Underwriters are working with clients to adapt insurance coverage to meet these changing exposure requirements.

When companies change their core activity, their risks change too. Casualty exposures have also altered as companies have switched to become part of an “emergency industry.

Where garment manufacturers have changed their operation to produce facemasks, for example, there are again a different set of risks to be considered.

Across the world, there are regulations setting out safety requirements for masks that are used in medical situations. In Europe, FFP2 is the standard that masks must meet; this is equivalent to the N95 respirator masks used in the US and meets World Health Organization guidelines.

For masks that are not used in medical situations, the exposure is less onerous.

Delivery companies too have changed the way in which they work and the items which they deliver; for example, some have shifted their focus to delivering groceries to the elderly or vulnerable. Again, this means that their liability exposures are somewhat different.

Casualty underwriters are talking to risk managers in all sorts of industries to work out how their risks might have changed and how these might be addressed.

Across AXA XL, colleagues have been working to ensure that clients have the right coverages in place to enable them to make changes to their business models to help the COVID-19 relief effort. For example, we worked with a broker to ensure that a high-end performance- clothing client had the correct coverages in place to be able to make gowns for use in hospitals. And colleagues also worked with a broker to help a global automotive supplier to have the right coverage to be able to produce medical equipment and respiratory tools using 3D printing.

These are uncertain and unprecedented times for individuals and businesses everywhere. We underwriters must take responsibility and play our part.  Just as our clients are adapting to meet the challenges posed by this global pandemic, so too are we adapting to provide risk management and risk transfer services to ensure they can carry out emergency operations and play their role in helping to overcome COVID-19.