Certain trends across the London insurance and reinsurance market that were in motion prior to the COVID-19 outbreak are expected to accelerate as a result of the pandemic, according to Ben Bolton, Managing Director at Gracechurch Consulting.
Prior to the rapid spread of the ongoing COVID-19 pandemic, the Lloyd’s and wider London re/insurance sector was on a mission to modernise in order to increase efficiency and relevance across the marketplace.
As the UK government introduced lockdown and social distancing measures, the London re/insurance market, like many other sectors, went remote and will likely continue to do so for quite some time.
Of course, widespread uncertainty remains around the ultimate duration and impact of the pandemic, but it’s expected that the disruption caused will result in some lasting changes as the world transitions to what’s been described by some world leaders as a ‘new normal’. Exactly what this ‘new normal’ looks like for industries of all shapes and sizes, including the risk transfer space, remains to be seen.
In a recent blog post, Gracechurch Consulting MD Bolton highlights some changes that might materialise in the London marketplace post-pandemic. These aspects, he says, reflect trends that were in motion before, and which he feels will accelerated due to the pandemic.
The first is market modernisation, he explains. “The enforced (and largely seamless) shift to zooming, teaming, e-trading – people actually using software to get the job done will shunt fogey-ish traditionalists out of the Market and we’ll enter a new era of modernisation where tech creates the space, time and analytics needed help the human insurance factor excel in terms of innovation and service.”
It’s an interesting point and is supported by the fact that since the Lloyd’s and wider London market has started working remotely, it’s largely been business as usual and technologies such as electronic placement have reportedly gained traction.
While the market has shown that it can operate digitally and remotely, Bolton stresses that the true value of in-person human interaction for certain parts of the value chain, such as effective selling, creativity or solving difficult problems has been realised and will increase dramatically after the pandemic.
“We now know what software is good for and what it isn’t. Talent acquisition will reflect this, with sales skills being in much greater demand; user-friendly seamless trading tech will develop rapidly too,” says Bolton.
Relationships have always been key to insurers, reinsurers, and intermediaries across the space, and perhaps now more than ever, the ability to work well with others is paramount to commercial success. According to Bolton, many brokers are now realising who their true ‘friends’ are during this pandemic.
Customer service is another area of the London re/insurance market worth consideration, notably an accelerated trend away from an operational model to a customer model.
“Specifically, organisations who have successfully organised and gone the extra mile to deliver and put their brokers, colleagues or customers first will be remembered and valued more highly. Service and the customer experience (CX) will now be invested in, measured and marketed much more in future,” says Bolton.
Additionally, in this new normal, suggests Bolton, the overhauling and streamlining of bureaucracy and inefficiencies will “become a necessity”, and in particular for the Lloyd’s market.
“The remote working experience has shone a light (if it needed shining) on the entropy caused by archaic systems and processes. Fixing this will be a major priority (if for no other reason than to make our jobs fun again!),” says Bolton.
The final point raised by Bolton concerns brand and reputation, and the fact that ultimately, insurance has not had a good pandemic. Bolton notes clumsy public communications and contradictions, warning that even those typically supportive of the sector have offered some timely warnings around its handling of the outbreak.
“We’ve been monitoring London Insurer brands for some time and will be interested to see the first results from our immediate post lockdown surveys in the next month or so. One of the metrics we look at closely is Trust – generally brokers associate insurers with being Trustworthy and especially Lloyd’s players: whether that will continue to be the case for all remains to be seen,” explains Bolton.