The Big Question December 2019: What’s top of your Christmas wish list for the sector?

Elliot Biggs, chief information officer at C-Quence

I can’t say I’ve ever contemplated an insurance Christmas wish list before, but there are definitely a couple of things I’d raise a glass to (a large one, full of a decent red).

Whilst popular opinion would have us believe everything is going to the wall, I remain optimistic for the future and for our industry. In light of that, my first wish would be that the industry shakes off the unhelpful and false image of insurance being a dull and crusty profession. We may have brought it on ourselves, but the good news is that changing these perceptions is absolutely within our gift.

My second wish would be to genuinely put the customer at the heart of what we do. We’ve complicated what is essentially a simple concept and made it unnecessarily inefficient. Getting back to offering understandable, quality products delivered efficiently in ways that our customers want would be a good place to start.

So the question often asked at various gatherings over Christmas: “What do you do?” should not be one to dread. In our enlightened and technological age, is that too much to ask?

Justin Elks, managing director and UK ERM and insurance lead at Crowe 

I’d like to see insurers prioritise their operational resilience in 2020 – not because they are being told to by regulators (although they are) but because they see the value and opportunity. Operational resilience is about building trust - trust that a business can withstand, absorb and recover from stresses and disruption while delivering on promises to customers. It has significant value beyond compliance; done well it can be a competitive differentiator, but this requires companies to change to a proactive mindset that assumes events will happen and think in advance about how to deal with them when they do.

Whilst operational incidents such as those experienced by TSB, RBS Nationwide and Tesco Bank have left companies with downside challenges, it’s great to see signs of companies seeing operational resilience as creating value; for example, EasyJet recently announced that its investment in operational resilience has reduced cancellations by 46% and lowered delays of three hours or more by 24% year on year.

We predict that customers will increasingly only use companies they trust to deliver services, so operational resilience will be a differentiator between businesses, critical to competitiveness. Other sectors are seeing the benefits – isn’t that how insurers should be thinking?

Sharon Bishop, chief executive at Close Brothers Premium Finance

The start of a new decade is always exciting, and like our our broking partners I’m optimistic about the 2020s. Brokers tell us that Brexit and regulation/compliance have been major challenges, but while regulation will always be with us, I’m sure everyone will be hoping that uncertainty caused by Brexit will start to fade, and we can all get on with focusing on growth and great service.

The 2020s will be the decade that technology really embeds itself across broking, and our new payment services technology, which enables commercial brokers to set up payment requests for their clients in a seamless and hassle-free manner, is in the advance guard of a raft of new tech which will transform commercial broking. Helping our broking partners make insurance affordable for their commercial clients is top of my wish list this Christmas. I’m hoping that the progress we’ve made in 2019 to embrace gender and ethnic diversity will be sustained next year. There’s a long way to go, of course, but for the first time I’m confident that a truly diverse insurance industry is not completely out of reach.

Finally, I wish that my horse Loopy Louis gets to Burghley and that I hammer the bookies at Cheltenham. Not much to ask for and of course entirely unrealistic just like my new year’s resolutions!

Mike Cranny, director at Create Solutions

If Andrew Bailey was Father Christmas, I would ask him pause for thought. A pause in further new regulations for a year to allow the market to read and digest the many thousands of pages they have published on SMCR, Pricing, Products and Value.

We compliance consultants have been struggling to keep up with the changes this year and this is our day-job. I feel sorry for the brokers. I have sympathy with the newly authorised claims management companies who still think regulation is optional.

If I am allowed a second Christmas present it would be a plea for the FCA to ration the use of clichés. I can only take so many references to culture and ”tome from the top” in a year.

Regulation is necessary but the FCA needs to find a better way to communicate its message, and if at all possible, learn to speak our language rather than the market trying to understand its bureau-speak.

Niall Barton, chair at Insurtech UK  

Dual Pricing  – consumer trust in insurance is extremely low, and this negatively impacts the entire sector, including insurtechs. Dual pricing has played a large part in the erosion of that trust, as consumers simply do not believe that the pricing of insurance is transparent or fair.

Insurtech UK wants to change the perceptions of insurance so that consumers see it as a positive purchase, with real faith in the price of products purchased and the certainty of being able to claim if necessary. Consumers should not be unfairly treated for their loyalty. The industry needs to tackle these challenges head on.

The FCA are publishing a consultation on remedies to dual pricing in the first quarter of 2020, which we will actively contribute our members’ thoughts. Eradicating this practice would be a huge step forward in rebuilding that relationship with customers.”

Matt Drinkwater, cyber and financial lines underwriting manager at NMU 

All we want for Christmas this year is to work with brokers to help as many small businesses as possible in 2020, through turning cyber insurance from a luxury into a necessity.

There is a common misconception amongst small businesses that they are not exposed to the risk of a cyber attack, even though, according to the 2019 Verizon Data Breach report, 43% of businesses affected were SMEs. . The cost of recovery can be catastrophic to a small business, with recent statistics stating that 60% of SMEs who suffer a cyber attack never re-open. These figures are likely to increase next year.

The main mistake SMEs make is that they assume they won’t be targeted, so brokers have a duty to educate their SME clients of their potential exposure and the cover available to protect them. If a business transfers money from one account to another, uses social media, relies upon computer systems, email and the internet or has a website that is a shop front, they are at risk. Furthermore, the majority of cyber claims stem from human error rather than a security system breach. Together, we can tailor appropriate cover to meet SMEs’ needs and protect their businesses.

Shirley Woolham, chief executive at Minster Law 

The UK has been in the grip of political conflict for the last three years, and I hope 2020 will bring more tolerance and respect for differing opinions, because resolving (or at least making progress on) the big global issues, such as migration, poverty or climate change can only be achieved through international collaboration. Collaboration is a necessity for the claims industry too, because protecting and supporting customers cannot be done properly in an adversarial system. I’m convinced that 2020 will be the year when defendant and claimant sectors finally realise that reducing frictional costs and delivering a fantastic customer claims experience can only be done if we come together.

There are signs of a consensus emerging, but sadly, not in MoJ Towers, where secrecy, suspicion and confusion over the development of LiP Portal risks massive customer detriment. My wish list therefore includes a plea to ministers to start afresh in 2020 and work with those of us who want to make the Portal a success.

Graham Gibson, chief claims officer, Allianz Insurance

Top of my Christmas wish list is gaining more support for flood defences and resilient repairs. Unfortunately households and businesses were once again hit by flooding this year, causing devastating damage. The insurance industry has a key role to play by helping customers to reduce, or mitigate, future losses but Government investment in long term flood resilience is hugely important. I would like to see our customers able to move towards more flood resilient methods of protecting their properties but this requires upfront investment and so continued funding remains essential.

Another really important area for next year is sustainability and I’d like to see this remain a priority for the entire insurance sector. In particular it would be fantastic to see how we can create a more sustainable future in Claims. At Allianz we will certainly be continuing our focus on adopting greener measures in 2020 and we’re excited to see the results of our new Claims partnership with specialist restoration company Plastic Surgeon, as well our recently launched green motor parts initiative.

And finally, while the insurance industry’s commitment to combatting fraud very much continues, I would like to see the much needed legislation come into fruition which deals with rogue CMCs once and for all.

Brendan McCafferty, chief executive at Brightside

Nobody ever said insurance broking was going to be easy, and I expect 2020 to be just as complex and challenging as this past year; we’ve seen some significant market events in the discount rate decision and the FCA’s interim report into dual pricing, while the macro uncertainties caused by Brexit are having an impact on planning, investment and prices, for example the cost of repairs (thanks in part to pressure on the currency). Certainty and stability may be top of the wish list, but in truth the pace of change in our industry is set to accelerate in the new decade, so there’s no point wishing for a quiet life: it ain’t gonna happen! But we could all have a much less stress if the stuff we need to go about our daily lives worked better. It took me ten hours on the train to get home to Cheshire from Bristol recently, so I wish the government would put some energy into fixing our antiquated infrastructure, which seems 50 years behind the times.

And listening to a Government Minister saying with glee ‘there are more electric vehicle charging points in the UK than petrol stations now’ – well, words fail me. Finally, on behalf of all of us at Brightside, I wish all Insurance Times readers a Merry Christmas and a prosperous and healthy 2020.

John Price, chief operating officer at SchemeServe

To change the name of ‘Loss adjusters’. This phrase conjures so many bad connotations and actively encourages claimants to scale up the value of the claim in the hope to break even when the loss adjuster reduces it.

The role of that person should be a helpful one. What’s needed in the event of a claim is someone to help dry out the floors, to arrange a hire care, to provide new accommodation, to get you back on the road. Just giving someone the telephone number of a repairers and a different number for car hire and expecting them to coordinate (an experience I have just been through) isn’t good enough. What to call this knight in shining armour? Well, Knight in shining armour would be a definite improvement, but personally, especially given the time of year, I prefer Fairy Godmother… Oh yes, I do.…

Simon Hird, director of broker and intemediary, Legal & General GI 

Year on year we continue to see a significant number of claims coming from homeowners whose properties have suffered damage from perils such as an escape of water, when in reality situations like these could sometimes be avoided by using technology. The development and installation of smart technology such as leakbots in people’s homes can be an effective, simple way of ensuring properties are being safeguarded from unexpected events. So, I would like to see builders and developers starting to incorporate this kind of technology into homes from day one to help reduce claims and eliminate the worry for homeowners when their property is damaged.

Technology innovation has been a big theme for the insurance industry in recent years. Ensuring the market continues to use technology that helps to improve and streamline journeys for advisers and customers will be vital in making sure the general insurance sector is fit for the modern age. Today’s customers are time-poor, so making their application and claims process easier and more efficient will help a greater number of people get the cover they need.

Finally, after a year which has seen high temperatures, torrential rain, and severe flooding in parts of the country, a benign weather year in 2020 would be very welcome.

Matthew Maxwell Scott, executive director at ACSO

Most insurers would love to find a shiny new reputation under the Christmas tree. The current one is broken, and no amount of decoration will disguise that. Sorting this out is essential if more regulatory intervention is to be avoided.

This year Santa has been spared the job of deciding who has been naughty or nice. Instead it fell to the Financial Conduct Authority to call out some seriously bad practice with dual pricing. Meanwhile the impression lingers that some insurers see claimants as being about as welcome as having all the in-laws over on Boxing Day.

So the sector’s stocking gets a lump of coal in it this year. To turn this into a diamond, rebuilding trust must be a New Year’s resolution. That includes better price transparency and helping ensure that the new RTA minor claims portal is launched only when all the necessary consumer safeguards are in place. In 2020, try to be good, for goodness’ sake.

Richard Jelbert, chief executive at Inzura

Top of our Christmas list at Inzura would be for the industry to get to grips with being customer centric – actions not words. They need to decide how they can be different using digital strategies and get closer to customers, NOT just bunker down and do the same thing every day.

Insurtech is here to help them do both and at low cost – they just have to reach out. For the larger insurers, my Christmas wish would be for them to invest in bringing an Insurtech partner into the business, to bring all of their data together and learn from InsurTech’s passion and energy.

John Harper, partner at Inflexion 

An overdue present would be realistic rates in the motor market. Consistent claims inflation, Ogden and whiplash uncertainty, minimal investment returns and regulatory change have all contributed to a challenging environment. At some point pricing needs to reflect this across the industry - could 2020 be the year?

Consolidation is the gift that keeps on giving. There is still a long way to go across the broking sector, which will result in far fewer, larger players alongside a host of genuine niche players. Is this a gift? Properly managed it will offer better service to clients, more efficient routes to market for carriers and stronger platforms for technological innovation.

The tech fairy has lots of work still to do. There are some interesting insuretech players out there but in common with the disruptive phases of other industries, most will fail or have to adapt to the mainstream. What they will do is blaze a trail and show the art of the possible, which will then be adopted and adapted by larger players with the resources and scale to turn them into viable commercial propositions.

The UK will remain Santa’s Grotto for the industry, where everything is possible and new ideas are tried. However, we must avoid complacency and remember that other places are trying to expand their own grottos….