Rising temperatures and a paradigm shift
This week, some kind soul alerted me to the fact that there are only 27 Mondays left until Christmas, you have to wonder where the year is going! Time seems to be moving so quickly at the moment and the insurance industry certainly keeps pace, with the ever-evolving saga of the FCA test case, a possible paradigm shift at Lloyd’s and the rapid development of products to meet the needs of our new normal.
Here’s to another week in insurance news!
A paradigm shift to growth?
Times could be a-changing at Lloyd’s, according to an interesting opinion piece from the Insurance Insider this week. The publication sensed a possible upcoming sea-change; in the face of rapidly hardening conditions and an of influx entrepreneurial capital, might the Corporation be forced to re-evaluate the strict financial oversight of recent years to take advantage of conditions, and allow its members to make hay while the sun shines? As the article pointed out, there are certainly both early signs of it happening, and recent (in Lloyd’s terms) precedents: for example Hiscox’s stamp capacity more than doubled in only 4 years from £359m to £841m between 1999 and 2003.
Proximate cause and the ‘Sweden defence’
It’s been a scorcher of a week here in the UK and temperatures are also starting to rise as insurers’ filed their defences in the landmark FCA business interruption (BI) test case. The eight insurers involved in the case; Arch Insurance (UK), Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE UK, RSA UK and Zurich, have filed a variety of defences in their case against the FCA to determine the validity of business interruption wordings.
As well as arguments over proximate cause, the broker’s role in advising their clients over the best policies for their needs, and a rebuttal of the ‘contra proferentem’ rule, Hiscox also put forward the ‘Sweden defence’. This defence draws on Sweden as an example of differing lockdown measures and the comparable economic loss between countries with “draconian” lockdown restrictions and those whose businesses largely remained open.
With potentially millions of pounds on the line for providers, it’s understandable that they will seek to look far and wide for reasonable defences in the case, but I do wonder how this battle is understood and perceived by customers?
Virtually covered
Though tentative steps are being made to bring people back together in person, it is predicted that many events will continue to be held online. The medium has worked well for many people, virtually bringing hundreds of people together for events at lower cost and lower risk than before. Seizing the opportunities presented by an increase in virtual events, Beazley has this week launched a new cover for this type of digital gathering.
Insurance Age reported that the insurer has developed a new standalone virtual transmission policy to cover organisers if their event is cancelled due to transmission failure. As we start to get glimpses of how different life may be for us all as we emerge from lockdown, it will be interesting to see how many other providers take the opportunity to innovate to reflect the new world.
And finally, … carry on communicating
It’s a message we’ve been championing since the beginning of the coronavirus pandemic and it’s clear that customers agree, in the face of global uncertainty it is essential to keep communicating.
At a recent Insurance Times webinar, A-Plan group CEO Carl Shukar indicated that his firm’s clients found some direct insurers to be “inaccessible” during the pandemic, with many finding it difficult to speak to someone and get the guidance they needed, when they needed it. According to Shukar, there is clearly an opportunity here for brokers to fill the communication gap and ensure they can be ready to provide knowledgeable responses to clients and guide them through their requirements
With thanks this week to:
https://insuranceinsider.com/articles/134103/opinion-lloyds-a-paradigm-shift-to-growth
https://www.insuranceage.co.uk/insurer/7516261/insurers-lock-horns-with-fca-in-bi-test-case-defences