Risk engineers provide solutions to commercial property vulnerabilities, helping insurers and businesses prevent losses as catastrophes rise. (Credit: Diki/Adobe Stock)
Risk engineers are at the heart of risk management. Their risk mitigation and loss prevention assessments and expertise help commercial property owners make informed decisions to harden their buildings and facilities.
PropertyCasualty360.com spoke with Scott Ewing, head of the Americas at AXA XL Risk Consulting, about the role of risk engineering in reducing property damage propensity for everything from water leaks to wildfires. Ewing has more than 35 years of experience in the risk engineering and insurance industry, leading a team of risk engineers across the U.S., Canada, Puerto Rico and Latin America.
PC360: What are the most common commercial real estate risks in 2024, and how are risk engineers addressing these risks?
Scott Ewing: Natural disasters (floods, hurricanes, wildfires, etc.), supply chain disruptions, and business interruptions. Fires and water damage are common. Risk engineers use new technology and data analytics to assess vulnerabilities and develop comprehensive risk management strategies. In the case of natural disasters, advanced modeling and mapping techniques may be used to identify high-risk areas and recommend protective measures such as infrastructure improvements, early warning systems, and even storage guidance to help avoid flood damage.
Risk engineers work with supply chain experts to identify potential disruptions and develop contingency plans to mitigate the impact. Their proactive approach enables companies to better understand and prepare for the evolving landscape of commercial real estate risk.
PC360: How does the increase in frequency and severity of catastrophes impact risk analysis? In what ways can property owners and insurers mitigate these risks?
Scott Ewing: [It requires] A more comprehensive, proactive approach… First, you can invest in resilient building designs and construction materials to withstand severe weather events. You can also implement robust disaster recovery plans and ensure adequate insurance to mitigate financial losses. Furthermore, using advanced risk modeling and data analytics, including predictive analytics and scenario planning, you can anticipate and prepare for potential catastrophes. Collaborating with risk engineers can provide valuable insights and guidance to mitigate these growing risks.
PC360: When it comes to risk mitigation, what is your standard advice for property owners who need to meet the requirements of their insurance policies?
Scott Ewing: Engage in proactive risk management practices. This includes conducting regular risk assessments, implementing recommended risk mitigation measures, and maintaining detailed records of all risk mitigation efforts. It is also important to stay informed of industry best practices and regulatory requirements related to risk management. By demonstrating a proactive approach to risk mitigation, property owners may be able to increase their chances of being insured and secure more favorable insurance terms.
PC360: How do risk engineer ratings benefit insurers covering hard markets?
Scott Ewing: Risk engineers can identify potential hazards, vulnerabilities and risk management deficiencies, allowing insurers to make more informed underwriting decisions. With a comprehensive understanding of the risks involved, insurers can accurately price policies and allocate resources effectively. Assessments by risk engineers help insurers develop risk improvement plans tailored to their clients, ultimately leading to a more sustainable and profitable portfolio.
PC360: Is there anything else you would like to share about risk management engineers and their role in P&C insurance?
Scott Ewing: Their contributions go beyond risk assessment to also include developing customized risk remediation strategies, making loss prevention recommendations and facilitating risk education and training for clients.
Risk engineers work closely with underwriters, claims professionals and insureds to ensure that insurance coverage accurately reflects the risk situation and that appropriate risk mitigation measures are in place. Risk engineers' insights and recommendations not only increase the insurability of your property or business, but also contribute to improving the overall resilience and safety of your insured assets.
The impact of risk engineering goes beyond policy: we play a role in protecting company assets and ultimately preserving employment opportunities by protecting jobs, which impact families and the communities in which they live and work.