1. The balancing act
Tom Hoad
Head of Innovation, TMK
June 2018

2. Innovation at TMK

3. Today’s agenda Aim of the session:
To highlight the perils and pitfalls of intangible risks and to see how insurance can be made fit-for- purpose in this important field
What we’ll cover
The trouble with intangibles
The Balancing Act interactive game
What we want you to get from today
Be properly briefed on the scale and growth of intangible risks
Take part in useful discussion and debate about the issues they create and what solutions work best for Risk Managers
Give us feedback on what we can do to help as insurers

4. Where is the value?

5. Handling social media

6. Our data …

7. “While 52% of AIRMIC risk managers say that reputational harm is their key concern, the number of insurance policies undertaken by businesses to protect their non-physical assets is proportionately lower than those for traditional risks such as Property”

8. Quick team questions …
1. What’s your team name?
2. What are your top three problems with intangibles?

9. The ‘balancing act’ game
An interactive exercise to get you thinking (and talking) about the balance between tangible and intangible risks.
The game
Tangible (gold) and intangible (blue)
Decide how to allocate your budget
20 chips, £100k each
Total risk management budget = £2m (mitigation and premiums)
Your team task each time
Read the brief - study the risks – place your chips
Open discussion and debate
Scoring - more chips on the right risks = lower losses!

10. Scoring Correct risks covered? (Tom will advise)
£6m loss on machinery breakdown
Divide by your 6 chips = £1m loss
No chips? Your loss is £6m
£3m loss on network failure
Divide by your 6 chips = £500k loss
No chips? Your loss is £3m
If you covered both risks your total loss is £1.5m. Or £9m if you didn’t cover them at all.

11. Hotel Company Task – 10 minutes
A UK-wide franchisor of 80 hotels operating under a single brand name but owns very few of its properties.
They have franchising programmes that permit other hotel owners and operators to use their brand and systems, for which they generally receive an initial application fee and continuing royalty fees.
Task – 10 minutes
As a team decide where you think the value of this organisation lies
How will you spend your annual risk budget (including insurance spend) of GBP2m against both tangible and intangible risks?
Place your chips on the board

12. Department Store Task – 10 minutes
A department store business that includes supermarkets, local stores and other small store formats, as well as having an online presence.
The company has various product lines including a full line of grocery items (meat, produce, natural & organics, deli & bakery, dairy, frozen foods, alcoholic and non- alcoholic beverages, floral and dry grocery, as well as consumables such as health and beauty aids, baby products, household chemicals, paper goods and pet supplies).
Task – 10 minutes
As a team decide where you think the value of this organisation lies
How will you spend your annual risk budget (including insurance spend) of GBP2m against both tangible and intangible risks?
Place your chips on the board

13. Logistics Company Task – 10 minutes
A logistics company offering shipping, mailing, fulfilment and returns that enable the sending of parcels and packages.
The technology platform used to offer services is run from leased data centres in various locations in Australia, India, Pakistan, Iceland, Germany and USA.
Task – 10 minutes
As a team decide where you think the value of this organisation lies
How will you spend your annual risk budget (including insurance spend) of GBP2m against both tangible and intangible risks?
Place your chips on the board

14. Final thoughts …
How would you invest your budgets to address the growing threats from intangible risks?
What do insurers need to do to help you get the balance right?