10th May 2022
As brokers prepare to head for Manchester for the first face to face BIBA Conference in three years, Chris Butcher CEO – Intermediary Services at the Davies Group, explains the event theme may be community but the challenge for the industry is flexibility.
For many in the market the return of the BIBA conference is the most tangible signal of a return to normality since the COVID-19 pandemic began.
However, while it may be seen as a return, we are all aware we are now living in a distinctly new normal. Covid and the geopolitical tensions which have surfaced in recent months and have been defined by Russia’s invasion of Ukraine, have had significant impact on the economy and with it the risks that brokers’ client face.
The pandemic has seen businesses become far more flexible in their approach to their operation and with it they are increasingly demanding a more flexible response to the way their risks are managed.
SMEs, if they are not in retail, are moving ever more to remote working and with it their risk profile has adapted. For many the requirement of commercial property insurance is no longer relevant, but they are now looking for cover to protect their IP and equipment which has been moved from the workplace to the homes of their management and staff.
For some the mix between online and face to face trade has altered dramatically and they are looking for these changes to be reflected in their corporate policies.
On a personal lines level the changes have become ever more profound. Prior to the pandemic the use of telematics to reward good driving behaviour and to move to a more usage based cover was already underway. The pandemic saw the need and ability to drive reduce significantly. In recent month the soaring costs of fuel due to the global energy price rises has seen motorists restrict their time behind the wheel as fuel prices continue to reach punitive levels. As such drivers are demanding flexibility. Some want to move to a system where the cover is moved to an almost journey by journey basis underpinned and built on a set premium to cover the threat of theft and damage from home.
As homeowners either work remotely or move to a hybrid working week, they are seeking changes to their policies to better reflect the fact that their homes are now occupied for far more of the week than it has been prior to the pandemic, and with it their risk profile has changed.
It leaves brokers needing to understand their clients changing risks and having the ability to adapt and deliver the flexible approach they are now demanding.
It will require insurers to adopt ever more flexible approaches to product coverages and terms. During the pandemic we witnessed some motor insurers offering a return of a percentage of premiums should policyholders fail to cover a certain number of miles across the duration of the policy.
We may see the MGA sector come to the fore given their ability to quickly adapt to change and are all too often seen as the ideal platform for insurers to test the water by committing the capacity.
The new normal is likely to challenge the market and as the first point of contact for the clients brokers will be the litmus test for how the market will need to respond.
To continue the conversation, get in contact with CEO of Intermediary Services, Chris Butcher on email@example.com.
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