Better value, more protection: Optimizing risk and insurance for a critical infrastructure facility

The risk and insurance challenge

A European critical infrastructure organization needed to update its insurance and financial risk management practices to ensure it was getting optimal value and protection and demonstrate this to key stakeholders.

The business had adopted a similar approach for many years, which was starting to raise concerns among business leaders, investors and financiers on the adequacy and efficiency of its insurance and risk management program.

The organization sought a solution to help modernize and optimize its insurance portfolio. It needed a clear, evidence-based rationale for its risk and insurance decisions, one capable of providing business leaders and investors with confidence the business was getting value while being properly protected now and into a long-term, financially stable future.

The risk and insurance solution

The business engaged our risk and insurance optimization consulting services, which calls on our Connected Risk Intelligence (CRI) platform.

We conducted a comprehensive risk assessment and optimization exercise that involved:

We inputted all the information gathered into our CRI risk optimization portfolio platform. This allowed us to both identify the most efficient retained risk and insurance structures that would balance cost with risk protection and isolate the specific steps the business could take to deliver this optimized risk and insurance program.

The risk and insurance impact

We identified a cost reduction of 14% using output from the CRI process. Our consultants presented these actionable analytical insights to stakeholders to consider implementing. We showed how by taking the recommended steps, the business could drive more value from its risk and insurance budgets while providing assurance and long-term confidence to investors and financiers.

The CRI analysis helped the organization challenge its assumptions, revealing it could afford to be more risk-tolerant in certain areas, particularly in retaining more risk rather than buying more insurance.

The risk analysis also showed where and how the business could achieve better value from insurance. Out of the seven classes of risk we analyzed, while four lines of insurance were providing value for money, three offered opportunities for better value. One risk line was overpriced, and the business could expect better value by self-insuring.

By realizing substantial cost savings with better balance sheet protection, the business could reallocate resources to areas where they provided more value.

The climate impact assessment identified two key locations as driving significant potential losses. This provided critical recommendations for future prioritization and refined how the business manages climate risk.

The ultimate reporting outputs from CRI provided clear, evidence-based insights for investors, many of whom appreciated the detailed analysis and the transparency of the modernized and analytical approach to managing risk.

By calling on advanced and dynamic risk analytics, the critical infrastructure organization is now not only more equipped to adapt to future risks, but better protect the balance sheet. With a methodology for making informed decisions the business can be confident will protect its investments effectively, improve financial stability and ensure it’s well-prepared to face future challenges.

Are you ready to secure better value protection for your organization? Get in touch to find out how you can optimize your risk and insurance with one of our actuarial specialists today.