17th March 2021
Steven Goate, Managing Director of Intermediary Services explains why the COVID-19 pandemic has created a new dynamic for the back office as firms examine how best they can deliver in the “new normal”.
The COVID-19 pandemic has had a profound effect on many firms and the return to a “new normal” has many firms looking to redefine their operational strategies. We have seen a significant uptick in the demand for our back office support services and systems as brokers and MGAs look to plot a course for the future.
As the world recovers from the pandemic, it’s little surprise that the management of start-up MGAs and brokers are now in a position to launch and are keen to do so with limited impact on their cost base.
Understandably, brokers and MGAs that are preparing to launch tend to be managed by those with the market knowledge and have identified the niche or sector in which they wish to operate. Typically, they will not have an abundance of staff and back office support, which although is a necessity, is not at the forefront of their thinking. When talking to providers, they will be looking for a cost-effective solution that allows them to focus on building the business.
What has been interesting is, aside from those seeking to form their new entity, the number of enquiries for back office support services we have received from established broking and underwriting entities. There are several reasons for this but the uptick in interest is indicative of the change in thinking that the pandemic has instigated in the market. While the industry has sought to support their clients throughout the pandemic, the economic slowdown has seen many firms looking at reducing the costs of their future operating models.
The sudden enforced move to remote operations, while testing the resilience of many firms’ disaster recovery plans, has also created a situation where firms have been required to consider a new way of working. While technology has enhanced the ability for many tasks to be carried out remotely, back office processes have a regulatory as well as operational role and there are certain aspects of the process which require rigorous adherence. The regulatory requirements will only grow in complexity and while the FCA and PRA are keen to ease some of the red tape, they remain determined to ensure that customer protection remains paramount. As such, smaller firms are seeking ways in which they can ensure they meet the necessary requirements, whilst tracking and adapting to future changes.
The move to remote working has also provided company management with the opportunity to reassess their future operational structures. Whilst the pandemic has created a new normal for working post the pandemic as the vaccine rollout drives the gradual easing of restrictions, it has also challenged companies to reconsider whether they need the size of dedicated office based resource they had previously..
The success of the ability to work remotely has opened the eyes of many firms to the benefits that the outsourcing of their back office functions can bring. Firms are looking to engage with a proven partner that has a track record of delivery across the industry.
The ongoing plans for process reform in the London and wider market has created a further dynamic, where firms are aiming to establish processes and systems that will enable the uninhibited flow of data throughout the transactional process.
We’re delighted to be able to support our clients at every stage of their lifecycle and continue to work to ensure that the back office needs be anything but front of mind for brokers and underwriters.
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