Still a tough landscape but some green shoots
While small green shoots of optimism are beginning to appear in parts of the globe with a relaxation of lockdown and the start of some commercial activity, we all know we are some way off from a return to a semblance of normality. For the insurance industry, there is no shortage of battle lines being drawn up, of opinions being sought and shared and the mulling over what the future might look like.
Right, let me tell you how it’s going to be
There’s currently a fair number of fingers being pointed, and views being expressed towards the industry. Whether it is the threat of class actions in the wake of claims declinatures that we see covered in many of the trade and national press outlets or calls by regulators and governments letting insurers and brokers know what is expected of them.
The FT reports today that the FCA is seeking a court ruling on the most commonly used business interruption policy wordings in an effort to quickly resolve a number of the key areas causing uncertainty and provide greater clarity for all parties. The vigorous discussion now taking place over policy clauses and exclusions does bring to mind the many initiatives reported on over the years about the drive to simplify policy wordings and make what is and isn’t covered clearer….A move too far maybe?
Whether the FCA’s actions will impact on moves by the growing number of businesses and action groups pursuing responses and outcomes from insurers will have to be seen.
Meanwhile, the debate around a state-backed or pool-based pandemic cover solution continues. Insurance Age reported on a call by broker NDML for the UK government to release funds from Pool Re to help firms hit by coronavirus. Commercial Risk (CRE) magazine covered calls by the German risk and insurance management association, the GVNW, for the creation of a state-backed insurance scheme and Insurance Post carried a piece on the ABI’s views on Pandemic Re.
Tough times need tough measures
Moves by broking giant Aon to curb expenses in the face of COVID-19 including pay reductions for a large number of employees attracted understandable attention this week. While economically driven, the impact on staff morale could create issues. The leaders of the other major brokers came out against similar moves in their organisations with one calling such a move ‘survival mode stuff’. But as Insurance Insider’s Adam McNestrie points out in his analysis of Aon’s actions - every CEO of every major broking company is looking very hard at their own assumptions and asking: “What does Aon see that I don’t see?”
Going it alone
Interested to read in Business Insurance about financial filings made by Tesla Inc. indicating the electric car and sustainable energy pioneer would not be renewing its D&O cover citing the “disproportionately high” premiums quoted by insurers. Of course, self-insurance is nothing new but with the significant level of liabilities directors and officers face and the shadow of exposures from COVID-19, transferring some of the risk to the people who understand it would seem to be a sensible move.
Not out of the woods yet
While the planet is getting a well-earned rest thanks to global lockdown, a story in PropertyCasualty360.com reminds us that we are still facing significant exposures from global warming. They report the findings of the U.S. National Centers for Environmental Information that parts of the Atlantic, Pacific and Indian Oceans all hit record temperature in March 2020. These rises in ocean temperatures are all potential pointers to a “chaotic” year of extreme weather events.
It’s life Jim but, not as we know it! (Ed: A Star Trek reference)
So how will we all remember this extraordinary period in time? Museums around the globe are looking at how best to document and create an appropriate record of life in a time of COVID-19 for future generations. Museums from British Columbia to New Haven, Connecticut and across the UK and China are asking people to send items and record not only events and how COVID-19 has changed their lives, but also how they feel about it.
The insurance industry in the UK is being encouraged to support the establishment of a museum dedicated to sharing the story of the evolution of the profession that will include the events and people that have shaped insurance - https://www.insurancemuseum.uk/ - I can see it now “the 2020 WFH gallery”.
Thanks to;
BBC.co.uk; FT.com; The Stamford Advocate; Insurance Age; Insurance Insider; Business Insurance; Insurance Post; PropertyCasualty360.com; BurnabyNow; insuranceNEWS.com.au and; The Global Times.