We are the champions....... maybe?
This week’s news on the insurance industry called to mind the lyrics of the rock gods Queen’s crowd favourite “We are the champions”. Okay hands in the air and sing along with me people: “I’ve paid my dues, time after time, I’ve done my sentence but committed no crime. And bad mistakes, I’ve made a few. I’ve had sand kicked in my face, but I’ve come through….”
I have hope that the insurance industry can regain its champion status. But what that will ultimately mean and in what shape the industry will be is in all our hands.
London, yeah baby
Looking for a non-COVID news fix this week? Then you need look no further than the publication of London Matters 2020. The report by the London Market Group and McKinsey tells the story of the London market’s pre-pandemic fortunes between 2010 and 2018. Reporting has been an interesting mix perhaps reflecting the lack of a real COVID-19 angle.
Insurance Insider provided some interesting insights and takeaways around the dominance of global corporates and the scale of international capital in London, the benefits of a growing North American market, but also the diminishing relevance of London for some carriers. Lloyd’s has a lot to consider of late, and when you read the fact that between 2010 and 2018, pure Lloyd’s business went from 41% of total London premiums to 16% while the premium written by carriers operating across both Lloyd’s and the company market almost doubled from 35% to 67%, you understand the importance of modernisation.
For www.artemis.bm it was the challenges facing the development of a market for insurance-linked securities. The piece cited the onerous and costly application process as being a real hurdle to convincing insurers, reinsurers, and fund managers that ILS in London is cost efficient and flexible.
The FT focused on the continuing struggle the London market faces in attracting women, highlighting that almost a third of companies have no females in the most senior roles. As a result, the bonuses paid to men are on average seven times higher than they are for women.
The 2020 report was about a time before COVID-19. What a future report will reveal about how the London market has fared once the full impact of the pandemic has been released may make for sombre reading.
Lovers and haters
If there were any stories that show the breadth of the reputational challenge the industry faces, they came in City AM. On Wednesday, the paper ran an opinion piece from Nickie Aiken, the MP for Cities of London and Westminster, reflecting on the findings of London Matters and calling the insurance and reinsurance industry jewels in London’s crown. The same day, the publication ran a story under the headline “Insurance brokers slammed for conflicts of interests amid coronavirus business interruption claim disputes”. The piece covered a report from MacTavish highlighting what it described as the “scandalous” conflicts of interests created by broker remuneration. This topic appears to be returning to the surface during the pandemic.
Are you OK?
It is mental health awareness week in the UK, so I was hoping that we would see more on this hugely important issue in the trade press. It seems to have been left to Insurance Day to provide comment with a submitted opinion piece. While the need to address mental well-being in the industry has been covered previously, now more than ever we need to ensure it continues to receive prominence.
A chink of light for BI claims?
As the COVID-19 and business interruption claims story continues to make headlines, it was interesting to read in Insurance Insider of moves by a group of UK brokers to develop a framework that might enable small businesses with BI claims to secure some payment. According to the report, the group has held talks with Hiscox and the FCA on a part payments solution. A regulatory green light on such a framework could help to avoid lengthy court battles between insurers and their policyholders and the inevitable reputational damage that could cause.
Golden girls and boys losing their lustre?
The InsurTech sector has long been heralded as a potential saviour or the enemy of the industry with its ability to cut through lengthy processing and deliver more flexibility and accessibility to products. However, their near magnet-like attraction to investors may be on the wane according to Reactions because of COVID-19. They highlighted that after an upward investment trend in late 2019, the first quarter of the year tanked with a drop of 54% in funding and experts saying that funding is likely to be constrained for some time to come.
As we begin surveying the winners and losers of COVID-19, let me leave you with the words of Mr Freddie Mercury, “we are the champions my friends and we’ll keep on fighting to the end.”
You can put your hands down now.
Thanks to www.artemis.bm , City AM, FT.com, Insurance Day, Insurance Insider, Insurance Post and Reactions.