Case Study: University of Cambridge - Insurance Risk Management
The Challenge:
Faced with a harsh market for property renewal in 2021, the University of Cambridge found itself unable to obtain property insurance cover for its £7.5 billion estate. The bottom line was that insurance underwriters wanted to have a much more detailed understanding of what was in each building, how effective the risk controls were, how much revenue might be lost and how effective the contingency plans would be in reducing indemnity periods.
Incident Ready Consulting’s role
With no clear methodology in existence, Incident Ready Consulting was asked by the University’s insurance broker to build a model that has since been promoted across the Atlantic to the USA.
The Methodology
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Establish clear governance with an Insurance Risk Management working group.
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Design and build a data model to establish the top ten “worst case loss scenarios”.
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Building visits on the top 50 buildings in phase 1 to confirm Material Damage and Business Interruption ceilings of cover. Establish an agreed method for calculating Business Interruption values by building.
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GIS mapping to establish fire clusters – confirm accumulation values at risk.
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Power BI dashboards to answer underwriter queries for:
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COPE data – construction, occupancy, protections, exposure (GIS - accumulations).
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MDBI data – material, damage and business interruption values at risk.
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Claims History.
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Risk management – status of property risk improvement recommendations including those of the underwriter.
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Validate University contingency plans.
The Result
For the University of Cambridge:
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Secured a layered property insurance cover.
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Enhanced its ability to secure cover in a competitive market.
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Obtained better insurance terms.
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Obtained a £400k insurance rebate.
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Obtained a waiver of average clause.
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Increased Business Interruption cover to £60m per event at no extra cost.
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Found that greater transparency of risk has also supported the business case towards the University self-insuring via a mutual.
For the Insurance Broker
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Incident Ready co-authored technical guidance and presented webinars to cascade this approach as best practice to the wider Higher Education Sector sponsored by RMP and hosted by Gallagher. Cambridge were invited to URMIA in the USA to present their journey.
Client Feedback
"This unique approach provides considerable comfort to both insurers and the University."
Phil Webster, Client Director, Education Practice, AJ Gallagher
Justin provided an excellent service supporting the University of Cambridge. His quick grasp of the complexities of our large organisation and the key stakeholders (and being able to communicate effectively with them) enabled a smooth roll out, with full engagement from the top down. Based on the interim Business Interruption review, we are now in the process of developing, with Justin, a full university–wide business interruption, resilience and contingency review and would not hesitate in recommending him to anyone contemplating the same.
Nicky Routh, Head of Group Insurance Services, University of Cambridge