Acknowledging the past and embracing the future
This week Alex reflects on a week of reparations, return to work plans and the rambling road to the upcoming BI test case.
Acknowledging the past
We have all been shocked by the death of George Floyd and this shock has turned to anger and a desire to drive change.
The apologies from Lloyd's and RSA for the parts they played in the slave trade in the eighteenth and nineteenth centuries have been widely reported, as has Lloyd’s plans to invest in programmes to retain, attract and develop black and minority ethnic talent and give financial support to organisations promoting inclusion.
Insurance Post reported on the renaming of Plantation Place, one of the City of London’s prime pieces of real estate and home to a number of insurance businesses. This move and the growing number of organisations expressing their support to tackle racism and inequality, will hopefully be the catalyst we need to affect real change.
Round and round we go!
While we are not quite on the steps of the Supreme Court, you get the feeling from the reporting about the ruminations, claims and counter claims surrounding the FCA test case on business interruption wording that it won’t bring any immediate clarity.
This week we saw reports on the concerns of insurers about the FCA’s plan to use the Cambridge Analysis – used by the UK government in determining rates of COVID-19 infection – in its test case. While the regulator sees the use of the methodology as a way to help policyholders place the burden of proof onto insurers, the insurers cited in the test case are decrying its use as a ‘novel mechanism’ and even warning that another trial might be necessary to deal with the issue.
In another twist, The Times reported on concerns raised by Mactavish about the FCA’s choice of representative in the test case - Herbert Smith Freehills. It was claimed that as the firm works for some of the insurers whose policy wordings are being reviewed, there was a conflict of interest. A claim denied by the Regulator.
No doubt as we progress to the court date at the end of July and once it gets underway, we can expect more of this. For those thousands of businesses affected by the impact of the pandemic, we have to hope we can answer their fundamental question, “am I covered?” soon for the sake of their livelihoods and the reputation of the insurance industry.
Back to a kind of normal
After months of home working, there a many reason why ‘returning to the office’ will be a welcome and important step. With plans for rotational working, splitting teams and staggered working days and considering the needs of social distancing all in the mix, it is not going to be an easy job for insurers and brokers planning their return to the City. But of all the factors in play, the most critical will be the employees’ level of comfort and confidence that their workplaces will be safe and secure and, for many, the risks of travelling on public transport, will be a significant consideration. According to the Insider this week, company staff surveys have shown little appetite for a return to EC3 because of this issue.
We’ve also read about Lloyd’s plan to open its doors at the start of September but with 45% of its normal population of underwriters, brokers and staff. At the same time, the Corporation announced the launch of a virtual underwriting room. Many of us are looking to the 330-year old institution to signal a return to some form of normality, so these are some positive steps.
Lights, camera, inaction!
The extent to which insurance impacts on every aspect of personal and commercial life can sometimes come as surprise to those outside the industry. Like most other industry sectors, the pandemic is unravelling expectations and reshaping plans and of course, impacting financially on insurers, brokers and MGAs alike. The integral role of insurance and what that means as the industries it serves are impacted came through loud and clear this week as we read about rating agency S&P’s decision to revise its outlook on Allianz Global Corporate and Specialty from stable to negative. A significant contributing factor was its exposure to the level of film and TV production cancellations and postponements. Perhaps more than any other industry, insurance faces tangible impacts from exposure to this kind of contagion.
With thanks to: The Guardian, Insurance Post, The Times, Insurance Insider and The Insurer
https://insuranceinsider.com/articles/133951/lloyds-underwriting-room-to-run-at-45-capacity