Defining times Industry leaders give their thoughts on (among other things) a pandemic, rising catastrophe costs and increasing market tensions
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nsurance News asked senior executives about the path ahead after a tumultuous year, with an edited selection of responses published below. Participants are Aon CEO Australia James Baum, AUB Chief Broking Officer Ben Bessell, Insurance Council of Australia (ICA) President Sue Houghton, Marsh Head of Risk Management Asia & Pacific Scott Leney, National Insurance Brokers Association President Dianne Phelan, Steadfast CEO Robert Kelly, Underwriting Agencies Council Chairman Kurt Nilsen and Willis Towers Watson Head of Australasia Simon Weaver. What do you see as the main opportunities for the insurance industry in 2021? James Baum: The events of 2020 highlighted how businesses and the public sector are operating in a volatile world of unforeseen risks. The COVID-19 crisis is one example of a highly specific challenge which lacks an equally specific solution. In an environment where we are seeing
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industries, economies, communities and individuals underserved or not served at all because of current market dynamics, our industry has an opportunity to create more affordable and scalable products which will narrow the underserved gap which currently exists. Sue Houghton: As the risk and intensity of natural disasters increases in Australia, the insurance industry is strengthening its focus on critical economic support to communities, households, and businesses. ICA is advocating for lasting improvements to hazard exposure and adopting a systematic approach to disaster risk reduction. Working collaboratively across a range of stakeholder industries such as building, property and real estate, banking, financial counsellors and government disaster agencies, the insurance industry is striving to identify and progress practical solutions that will improve the resilience of Australian homes. Robert Kelly: The biggest opportunity the insurance industry has got right now is to
actually take advantage of the debacle about the pandemic coverage or lack of coverage, or inability for people to know whether they did or didn’t have cover. This may stir the consumer into thinking, “you know what, insurance is not a commodity. It’s not like buying a Big Mac or buying a paper. Maybe I need to spend more time on the nuances of what insurance does and familiarise myself with what I am insuring”. Kurt Nilsen: The underwriting agency sector will continue to show great growth, provided they have the capacity to meet the increasing demand. Agencies have the ability to adjust to market needs at fairly short notice, which gives them an advantage over the larger company markets. There will be M&A opportunities which could provide great growth opportunities and add value for brokers. Scott Leney: The main opportunities are improved clarity of coverage in insurance contracts, greater stability in premiums to relieve pressure on businesses, and improved risk quality as businesses better
