This is primarily due to the fact that the insurance industry is worried about exposures that it says it cannot quantify.

Torsten Jeworrek, member of Munich Re's Board of Management and Chairman of the Reinsurance Committee, said that to solve this problem insurers need risk managers to open up and share information on their practices and supply chains.

“We do not know more than you about your supply chain management…We have to really understand the structures within the organisations and in your business models and I think there is a deficiency here that we have to improve upon,” he said.

Whilst Mike McGavick, CEO at XL Group, agreed on this point he added that insurers are then going to have to transfer those data sets and the information given more quickly than in the past. We are not going to get complete data sets on CBI risk, he said.

“The rate of change our clients needs is so fast that if you want a full historical norm data set the industry will have come and gone before you insure it. And this is going to challenge us to use data and use relationships in new ways to be able to respond quickly enough before the risk opportunity disappears,” he said.

He compared the current situation with CBI cover to those days when business muddled through prior to the creation of insurance markets.

“In those days you just sent lots of boats and some got through, that was your insurance programme…That is what you are doing now on CBI. In essence you have pre-planned a number of alternative supply routes in case there is a disruption on one or another and that is enormously inefficient,” he continued.

Mr McGavick went on to say that the success of the CBI market may eventually come down to take up rates amongst buyers. “So far clients’ reaction has been that it is very interesting but it is so expensive.”

Fellow panel member Peter den Dekker, President of Ferma & Corporate Insurance Risk Manager at Stork BV argued that insurance buyers are not always afraid of the price of cover so long as it provides worthwhile protection. He added that the buying community is more than willing to sit down with the risk transfer industry to help them in any efforts to plug the insurance gap.

“We can have a discussion about how we can maybe adjust and contribute. You have to understand what the client wants and then we have to understand where you are coming from and then maybe we will come to an interesting solution,” he said.

Grahame Chiltern, Chairman of Aon Benfield and Vice Chairman of Aon Group, said that the insurance industry has to think again about CBI cover following the Japanese earthquake, but said it was putting in work behind the scenes to come up with a better offering.

“I actually do believe that with the work that is going on in both the insurance and reinsurance industry we will end up with a much more stable product, which has to be created with the end user in mind,” he said.

“There has been an enormous investment made to try and do that. CBI is actually an issue that is causing problems for business and generally is not necessarily insured properly,” he added.

Mr McGavick encouraged the insurance industry to respond. He pointed out that whenever there is a gap between the economic impact of events and insurable covers there is enormous opportunity for the risk transfer industry.

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