Modern Insurance Magazine Issue 42

42 ISSUE

ISSN 2515-3803

Brexit: Greater clarity – greater autonomy Graeme Trudgill, BIBA. Matthew Francis, KPMG UK

Working with

Insurance, Risk, Financing and Development Mark Carney, Bank of England

Drone Technology: The changing face of the claims cycle Jason Nichols, Kespry

How to Survive and Thrive Sam Borrett, Legmark Ltd

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WELCOME

W

hile we are well on our way into this new decade, I think now is a good time to pause for a moment and think about where the industry’s future is heading. Although there is no such thing as a crystal ball for insurance, there are a few trends, changes and disruptive forces we need to be paying close attention to over the next year. This edition showcases a handful of those concerns via a star-studded line-up offering their predictions on the issues that will shape the industry over the next year and beyond.

The 31st January is officially ‘Brexit Day’, but there are still many questions left unanswered about how the insurance sector can make Brexit work, both for the industry and the customer. Graeme Trudgill, Executive Director at BIBA, states the case from the point of view of the insurance broker, while Matt Francis, Insurance Director at KPMG UK, gives his take on how Brexit will impact insurers. Read the outcome of their discussion on pgs. 16-19.

Rachael Pearson, Project Manager

The industry is evolving, and innovative propositions are being fuelled by disruptive technologies, next-gen business models, and customer expectations. We need to take innovation within our organisations seriously if we are to better ourselves and our businesses. Manjit Rana makes his prediction on pgs. 9-11 that the future of insurance is innovation. His Insight piece discusses how the industry can better approach innovation, and how innovative technology-based solutions can be used to better service today’s constantly connected customer.

Climate change is at the top of many agendas this year. Modern Insurance had the pleasure of speaking to Mark Carney, the outgoing governor of the Bank of England and Boris Johnson’s finance advisor for this year’s COP26 climate change conference. On p.20-23, Carney spoke of the role of insurance in smoothing the transition to a 1.5 degree world, reporting that both sides of insurers’ balance sheets needed to respond if we are to reduce the protection gap and support the resilience of households’ and companies growing climate risks. Dr Bronwyn Claire, Senior Programme Manager for ClimateWise, also gave her take on the debate, explaining ClimateWise’s role in addressing climate change and the effect it’s having on the insurance industry.

And there’s loads more, most notably our supplement in partnership with Carpenters Group. Following the theme of collaboration, we spoke to leaders within the industry about their ideas of collaboration and the benefits it brings to the entire eco-system. Here you can find interviews with the Executive Board of Carpenters Group, including Donna Scully, Donna Richards, Karen Campbell, and Alan Hayes, as well as BIBA’s Steve White, and the IFB’s Director of Insurance, Ben Fletcher.

And a final reminder that nominations are open for the third annual UK Customer Service Excellence Awards! Nominations will close on Friday 28th February, so make sure you don’t miss out on this opportunity to celebrate outstanding customer service within the industry. You can find all the details on how to enter at www.customerserviceexcellenceawards.co.uk. Good Luck!

Rachael Pearson, Project Manager, Modern Insurance Magazine.

01765 600909 | rachael@charltongrant.co.uk

Editors Megan Tait-Davies Will Cotton Project Manager & Events Sales Rachael Pearson

ISSUE 42 ISSN 2515-3803

Modern Insurance Magazine is published by Charlton Grant Ltd ©2020 All material is copyrighted both written and illustrated. Reproduction in part or whole is strictly forbidden without the written permission of the publisher. All images and information is collated from extensive research and along with advertisements is published in good faith. Although the author and publisher have made every effort to ensure that the information in this publication was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

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M A G A Z I N E

CONTENTS 09

12

20

INTERVIEWS

INSIGHT 09 The future of insurance: innovation

12 A new vision of the future

Manjit Rana, discusses how the insurance industry can better approach innovation, and how innovative technology-based solutions can be used to better service today’s constantly connected customer

16 Getting Brexit done

EDITORIAL BOARD 27 Find out what our editorial board panel of experts have to say in this edition of Modern Insurance Magazine.

EDITORIAL

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Liz Basten, explains how Wealth Wizards are bringing financial services into the present with the help of technology and digital experiences.

Since the referendum vote on 23 June 2016 went in favour of the withdrawal of the United Kingdom from the European Union, much has been discussed about the effects Brexit will have on the UK insurance sector and, crucially, how to avoid disruption to customers. Debated by Matthew Francis, KPMG UK, and Graeme Trudgill, BIBA.

SECTOR

Recently, Mark Carney, spoke at event in New York on the subject of ‘Insurance, Risk Financing and Development’. Modern Insurance reports on the key points.

24 The ClimateWise physical and transition risk frameworks

Dr Bronwyn Claire, gives Modern Insurance an insight into ClimateWise and the role it’s playing to address climate change and its effect on the insurance industry

SOAPBOX

39 Modern Insurance’s panel of resident associations

outline the turbulence ahead for the Claims Sector

CONTRIBUTORS

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20 Insurance, risk, financing and development

M A G A Z I N E

CONTENTS 47

55

65

F E AT U R E S 47 Industry innovators 55 How digitisation interview: Blocksure affects customer

After observing other insurance interaction and systems being designed with little the continued thought for the consumer, Ranvir Saggu, CEO, took the chance to importance of make this right. Modern Insurance human interaction caught up with Ranvir to discuss the next steps for Blocksure. in the process

Richard Sheridan, delves into how the continuous and fast-paced 51 New decade sparks evolution of our digital lives forces urgent need for us to constantly rethink the claims motor insurance process as we know it. providers to get 57 Recruitment in e-mobile ready insurance

Jason Roberts, discusses how the motor insurance marketplace undoubtedly has a role to play in supporting the vision for a more environmentally sustainable mobility future

53 How to survive and thrive

How can digital marketing be better utilised for a business to succeed in 2020? Sam Borrett, Director of Legmark Ltd, discusses how.

Steven Lawes, CEO of Lawes Group, discusses how recruitment is changing in the insurance industry.

58 Drone technology: the changing face of the claims cycle

Jason Nichols, Director of Product Marketing at Kespry, discusses how drone technology is helping to speed up the claims process at the same time as ensuring more accurate claims are made.

60 Car insurance that keeps getting better: By Miles

Speaking to Modern Insurance Magazine, James Blackham, CEO, talked us through the concept behind By Miles, and how he sees the future of car insurance adapting to changes in the market.

63 Five things insurance leaders can do to help organisations flourish through turbulence

Andy Lothian, CEO Insights Group, debates how the insurance industry is on the cusp of change.

65 Just a thought from Eddie Longworth

Thoughts on what are the fundamental issues that I feel should shape the coming months.

10 MINS WITH Disclaimer: Our publications contain advertising material submitted by third parties. Each individual advertiser is solely responsible for the content of its advertising material. We accept no responsibility for the content of advertising material, including, without limitation, any error, omission or inaccuracy therein. We do not endorse, and are not responsible or liable for, any advertising or products in such advertising, nor for any any damage, loss or offence caused or alleged to be caused by, or in connection with, the use of or reliance on any such advertising or products in such advertising.

66 10 minutes with‌

Karen Graves, Chair of the Independent Women in Insurance Committee (iWIN)

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E D I T O R I A L

B O A R D

CONTENTS

27 A call for clarity

David Williams, Managing Director, Underwriting and Technical Services, AXA Insurance (UK)

27 Happy employees make happy customers

Andrew Chandler, Sales Director, FMG

29 Claims in 2020 – people and technology

Jason Tripp, Managing Director, Coplus

29 Get it right

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Donna Scully, Director, Carpenters Group

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31 Sustainable insurance solutions

Graham Gibson, Chief Claims Officer, Allianz

31 What do you think will be the defining trend for your business in 2020?

Nik Ellis, Managing Director, Laird Assessors

33 Keeping Up

Lesley Jackson, Chief Commercial Officer, EDAM Group

33 Building flood resilient communities

David Nichols, Chief Claims Officer, Zurich

E D I T O R I A L

B O A R D

CONTENTS

35 What do you think will be the defining trend for your business in 2020?

Neil Marcus, Marketing Director, Selsia

SECTOR SOAPBOX 39 Turbulence ahead for the claims sector

35 The time to innovate

Lisa Bartlett, President, Crawford & Company

37 The SME market represents a major area of growth for insurers, what can the industry do to capitalise on this opportunity?

Jonathan Guard, Commercial Insurance Director, LexisNexis Risk Solutions

37 Embracing technology for business

James Macbeth, Managing Director, Auto Windscreens

Paul Nicholls, Chair, Motor Accident Solicitors Society (MASS) and Senior Partner at Nicholls Brimble Bhol Solicitors.

39 FOIL in 2020

Anthony Baker is a Partner at PLEXUS and President of Forum of Insurance Lawyers (FOIL).

41 Why the terrorism gap remains

Andrew Gibbons ACII, Managing Director of Mason Own, Financial Services Ltd, Chair of Industry Claims Initiative on behalf of BIBA.

41 Reforms 2020

Gordon Dalyell, President, APIL.

43 The UK in 2020

Dr Matthew Connell, Director, Policy and Public Affairs, Chartered Insurance Institute (CII).

43 Tomorrow’s tech

Laurenz Gerger, Policy Adviser, General Insurance, Association of British Insurers (ABI)

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right people. right skills. right technology.

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END-TO-END COMPLETE CLAIMS & LEGAL SOLUTION

INSIGHT

In order to stay relevant, we must rethink what the insurance company of the future will look like

The future of insurance:

innovation Manjit Rana, InsurTech and Insurance Innovation thought-leader and Managing Director of Corporate Innovation, discusses how the insurance industry can better approach innovation, and how innovative technology-based solutions can be used to better service today’s constantly connected customer.

The HR department of any large corporate has responsibility for performing human resource management, overseeing various aspects of employment and dealing with activities relating to employees – they provide the expertise and knowledge to help managers manage their teams, rather than managing the staff themselves. Innovation is the same. As corporates start to advance in their innovative thinking, innovation labs become like the HR department – a centre of expertise that provides support services to every manager within the business to enable them to innovate more effectively; innovation needs to be treated as a core competency of the business not something that is tagged onto the edge.

While many executives recognise and talk about the value of innovation, few are bold enough to admit a true understanding of the process of implementing it into a business model, fewer still

X

who have successfully done it. However, committing to innovation is a risk that will affect the existing business, one way or another.

But as we enter a world of big data and rapid technology changes, can the industry risk not being innovative enough?

A starting point More and more organisations are finding themselves having to exploit new ideas and opportunities in order to respond to growing competition and evolving customer needs. Over the last couple of years, virtually every insurer has launched an innovation programme and created an internal innovation team. Although this may seem like an effective strategy, it is no winning formula.

Innovation needs to be taken seriously and this starts by recruiting an innovation team that has relevant innovation experience and can offer comprehensive operational support.

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INSIGHT

Trust and loyalty are two aspects that need to be greatly improved between the insurer and customer if we are to make waves with innovation and offer relevant services that customers will not only want but greatly appreciate

If you look at most industries that have been disrupted to date, whether it’s taxis, entertainment, retail or the motor industry, the biggest disruption has come from outside the industry itself.

Uber was not founded by taxi drivers; Tesla was not founded by someone with a motor manufacturing background, and Amazon was not a high street retailer. Innovative solutions typically stem from people being frustrated by an existing proposition or process - that’s why most innovation that comes from within insurance is categorised as incremental innovation, i.e. improvements to existing processes often referred to by innovation professionals as H1 or Horizon 1 type solutions.

Innovation is typically categorised into three bands or Horizons, ranging from H1 to H3. H1 typically provides the quick wins and is the easiest place to start. It usually involves partnering with start-ups and scale-ups to solve existing challenges. H3 is the opposite end, the ‘blue sky’ thinking end, the ‘what if you could do …’ type of projects. H2 and H3 projects typically involve businesses creating their own internal start-ups, and partnering with other corporates such as mobility companies, home security providers or telcos, to develop eco-systems through sharing data.

The industry of the future A recent PwC survey discovered that 44% of insurance directors think that “most existing insurers will not survive, at least in their current form”. Transformation and new initiatives are inevitable.

Customers’ behaviours are rapidly changing as they become more connected through the availability of smart devices, providing the industry a much-needed push to explore new digital capabilities and IoT (Internet of Things) devices. Availability of new data and the way consumers and businesses want to access and utilise

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services is changing thereby disrupting whole industries. FinTech and InsurTech start-ups are generally seen as being potentially disruptive because of their technology. In most cases it’s their approach to solving a problem that is the disruptive element of their proposition, they are often seeing the challenge through a different lens or just ‘connecting the dots’ differently, and the technology is just an enabler.

In order to stay relevant, we must rethink what the insurance company of the future will look like. Consumers are questioning why they pay for an annual motor policy when most cars spend 80% of their time on drives or parked up (I’m sure the underwriters will be screaming that they’ve taken that into account when they calculated the premium but the consumer does not see it that way); when their car is parked in the car park, why are they paying for personal injury cover, or windscreen cover or 3rd party liability? This kind of thinking is challenging the industry to create ‘on-demand’ products and these are not just limited to motor insurance, we are seeing these types of products appearing across a whole range of insurance lines, from marine to home, to gadget, travel and commercial hire (taxi), and it is not constrained to insurance - Rolls Royce bills it’s airline customers for the ‘active hours’ that its engines are operating rather than selling them the engine.

On-demand insurance Most people think innovation is all about technology and whilst technology is playing an increasingly significant part, we also need to consider how consumer behaviour and expectations are changing. New business models are emerging from other industries and new types of propositions can be created once

INSIGHT

Innovation needs to be treated as a core competency of the business not something that is tagged onto the edge

we have access to new data – this will inevitably create new opportunities as well as new threats to the incumbent players.

The on-demand approach is not just restricted to the insurance industry, car manufacturers recognise that in the future most of us are unlikely to want to own a car, particularly if we live in a big city - we are already seeing subscription models where for a monthly fee you can swop and change the car for a model that suits your purpose, i.e. you could have a different car during the week to the one you use at the weekend. Car manufacturers have launched car sharing services and they are investing in broader mobility services; hotel companies are investing in home-sharing services where they can manage the property rental and servicing piece without owning the property. These new propositions also mean that we need to rethink the risk that needs to be covered.

We are starting to see new ‘eco-system’ based business models and insurers will either be a part of an eco-system, i.e. provide the insurance element for a broader eco-system (for example, a mobile operator offering travel cover as soon as I land in Munich for my two day business trip), or owning the eco-system itself. This will be where an insurer transforms its business into being a home management provider and partners with other organisations to provide the homeowner with a one-stop service that encompasses everything to do with the management of their property.

Take the example of a car manufacturer such as BMW, as I type my destination into the Satnav system, could they provide me with cover for that specific journey? They have access to the route, the road conditions, how busy the roads are at that time, my normal driving style, the time of day that I’m making that

journey etc. Could they influence the route that I take by offering a reduced premium for that specific trip if I took a safer or less busy route, or even suggest that I take the train if it’s likely to be quicker than driving at that particular time of the day? BMW in that instance could create a completely disruptive type of motor policy simply because they have access to data that the insurer does not see. Once we see one motor manufacturer deploying this model the others are sure to follow – just look at the number of Uber competitors that are emerging, and even Grab (an Uber competitor in Asia) has evolved into one of the biggest payment platforms across Asia, where you can now also pay for groceries via your Grab app rather than just order a taxi!

The difference between a new InsurTech trying to create this type of product and BMW is that BMW already has trusted relationships with millions of consumers, the capital and resources to create and productionise such a proposition, and access to the required technology and data. Trust and loyalty are two aspects that need to be greatly improved between the insurer and customer if we are to make waves with innovation and offer relevant services that customers will not only want but greatly appreciate.

The insurance industry is evolving, and innovative propositions are fuelled by several elements ranging from disruptive technologies, next-gen business models, and customer expectations. If we are going to take innovation within our organisations seriously, we need to focus our approach and understand our starting point better.

Manjit Rana is an InsurTech and Insurance Innovation thought-leader, Board Advisor and Insurance Expert, and Managing Director of Corporate Innovation (InsurTech).

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INTERVIEWS

A

new vision of the future Speaking to Modern Insurance, Liz Basten, Chief Marketing Officer at Wealth Wizards, the market-leading financial advice technology provider, told us how they are bringing financial services into the present with the help of technology and digital experiences.

Q

You have held varied marketing roles in varied sectors, working with large corporates to transform digital customer experiences – what drew you to financial services and Wealth Wizards?

A

Over more years then I care to remember, I worked in financial services before deciding to move into the retail sector, but what drew me back was the purpose of Wealth Wizards and the opportunity to work for an organisation that has a mission that benefits society as a whole. Our mission is to make financial advice and guidance affordable and accessible to everyone. It is incredibly exciting to help transform this sector, and especially being given the opportunity to work with an artificial intelligence who is a regulated financial advisor in her own right.

Q A

You’ve mentioned working with an artificial intelligence, could you tell us a bit more about MyEva?

The best way to think of MyEva is as a personality and not as technology. MyEva has trained for ten years on best practice advice and guidance, and she is trained to speak to you in a nonjudgemental, jargon-free and empathic way to encourage people to think about how they manage their money before they start planning for the future.

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A lot of people need financial advice and guidance but are either fearful of making the step, don’t know how to make the step, or just simply don’t have the time. MyEva is a financial advisor and coach who is available at anytime and anywhere, and who can help and empower you to take control of your financial situation.

If you don’t think of MyEva as a persona but as an algorithm or as an AI, MyEva is a trained algorithm that can go on a million different journeys depending on your responses. Those responses are measured in two ways; either through objective measures, i.e. what you spend each month compared to what you earn, or via subjective measures, which is your behaviour, i.e. defaulting to the minimum payment on a loan each month because it feels safe, even though this could be financially damaging in the long term.

It is those objective and subjective measures that an artificial intelligence can determine a connection with you on the right level, but, it can do it with millions of people all at the same time while still having a one-on-one relationship with you.

Going digital doesn’t mean leaving everything else, it just means embracing digital as another way of interacting with customers and your brand

INTERVIEWS

Wealth Wizards’s digital transformation was all about making our own processes fully automated and improving digital engagement in financial services overall

Q A

What changes do you think should be made in our approach to financial advice?

There are a couple of issues we have in our approach to financial advice as an industry and this only hinders our progression.

Firstly, there is a perception in the industry that the robots are here to take our jobs, which causes a lot of organisations to fear new technology and innovation. How I counter that, and it is something that Wealth Wizards are trying to achieve, is by explaining that technology and people are not mutually exclusive.

Technology is only enabling a company to reach more people at the same time at a manner and scale that you couldn’t possibly imagine. In terms of MyEva, technology is working alongside our human advisors and not replacing them.

One of the ways that Wealth Wizards have tried to address that concern is by regulating MyEva – she is regulated in her own right. Just as a human advisor needs to be regulated by the FCA, when MyEva gives a report at the end of the financial advice process, it is signed by MyEva, she is regulated.

There is a lot of trust building that needs to be done. We have been introduced to many new and different processes over the years but once we have become familiar with them then that anxiety and uncertainty is removed. We admire a company called Babylon

Health. They do exactly what we do but rather than MyEva being a digital advisor, it is a digital doctor. A lot of people ask if the AI gets it wrong in our industry, but what if the online doctor got it wrong, there are potentially much more serious consequences. It is all about building trust. We are all products of our own experience and I think that is part of the trust issue that we have with technology.

Q

The customer experience is crucial to a business’s survivability, and marketing plays a key role in defining and monitoring the customer experience; how is digital transformation now driving the customer experience, and how has the marketer’s role adapted to that change?

A

Digital transformation has driven customer experience in terms of what people expect in the immediate term. It is, however, another marketing channel and not there to replace everything else. Digital marketing has completely transformed the landscape in terms of expectations but also the level of personalisation expected. Any marketer would never put all their eggs in one basket when it comes to what channel you use.

Digital has just added another channel for us to utilise and has certainly raised the bar in terms of how we communicate on a personal and relevant level in real time.

Going digital doesn’t mean leaving everything else, it just means embracing digital as another way of interacting with customers and your brand.

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Q A

Can you tell me about Wealth Wizards’s own digital transformation?

Wealth Wizards is a FinTech that was founded ten years ago.

Our CEO was one of the original founders of Egg, which was the first internet bank. The whole creation of MyEva is built on the Wealth Wizards platform, the Turo platform, which is where we offer MyEva as a white label opportunity to the financial services sector.

Wealth Wizards’s digital transformation was all about making our own processes fully automated and improving digital engagement in financial services overall. Our transformation took a pretty significant turn when we made the decision to create MyEva and prove the concept of human and digital advisers working together to make financial guidance and advice more affordable and accessible to all. Our transformation has very much been about taking manual processes, learning best practice, and enabling automation of those processes in the ‘back office’ and using the principles of great digital customer experience to drive digital engagement in the financial services sector in the ‘front office’. We want the quality of digital experiences people experience in other sectors to be of a same or higher standard in financial services.

Q A

What further changes and/or opportunities do you expect to see in this space of digital transformation?

I think the next big thing is open banking. Having the option to work with people as money enters and leaves their bank account and to be able to give relevant, appropriate and trusted advice in that context is a real game changer. If open banking was embraced by the 50 million adults that currently access their finances online, then this opportunity is going to completely transform the financial services landscape, and we want to be at the forefront of that.

Liz Basten

is the Chief Marketing Officer at Wealth Wizards.

If open banking was embraced by the 50 million adults that currently access their finances online, then this opportunity is going to completely transform the financial services landscape

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INTERVIEWS

DONE Getting Brexit

Since the referendum vote on 23 June 2016 went in favour of the withdrawal of the United Kingdom from the European Union, much has been discussed about the effects Brexit will have on the UK insurance sector and, crucially, how to avoid disruption to customers.

So, as we edge closer to a deal or no deal, just what does ‘getting Brexit done’ mean to the UK insurance sector?

What has been the impact so far on the industry and, post-Brexit, will the EU Single Market still be important to UK insurers and brokers? How does the sector view the possibility of a no-deal scenario and has the industry been adequately consulted and involved, in what have been fairly protracted negotiations? And with the level of regulation and interconnection between the UK and EU financial systems, what’s the risk of policies signed pre-Brexit becoming invalid?

Once the UK finally does say ‘goodbye’ to the EU, it will have no obligation to comply with the stringent ‘one size fits all’ Solvency II regulations. Could, and should, Britain pursue similar restructuring along the lines of the Swiss or Norwegian models, both who operate independently

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of the EU. The Swiss model is close to Solvency II, whereas the Norwegian version allows the country to be part of the EEA (European Economic Area), although not a member of the EU. Or will the UK fully go it alone and create its own bespoke model and, if so, how long could that take?

Modern Insurance put these and other key questions to two experts for their opinions on how the insurance sector can make Brexit work for both the industry and the customer.

On the page opposite, Graeme Trudgill, Executive Director at BIBA, states the case on Brexit from the point of view of the insurance broker, while over the page Matt Francis, Insurance Director at KPMG UK, gives his take on how Brexit will impact the insurers.

If future access to EU customers or risks is to be based on the existing equivalency provisions, it would be a ‘no use to us deal’ as far as brokers are concerned, as it would have the same effect as a ‘no deal’

INTERVIEWS

Brexit:

brokering a deal Graeme Trudgill is Executive Director and a member of the main board at the British Insurance Brokers’ Association (BIBA).

He is a Fellow of the Chartered Insurance Institute and joined BIBA in 2001 following senior roles as an insurance broker. Graeme leads BIBA’s Corporate Affairs, authoring BIBA’s Manifesto along with working closely with members and advisory boards on representation, government engagement and broker promotion.

MIM: What does ‘Get Brexit done’ mean to the insurance sector?

GT: Brexit means very different things to very different firms in the insurance sector, some brokers have raised concerns that the removal of passporting is a significant problem for them in continuing with access to their EU clients where they have not established a physical presence in the EU. Other firms may have no EU clients, do not use EU capacity and are far less concerned.

MIM: Post-Brexit, will the EU Single Market still be important to UK brokers?

GT: Yes! When the UK leaves the EU, our members want a future trading agreement to be put in place with the EU that provides frictionless trade for the full range of financial services. Providing brokers with the ability to continue to exercise something akin to their current freedoms to service clients and risks which are domiciled in the EU without the need for a physical presence and local authorisation would be the solution that affected brokers are seeking.

MIM: How does the UK insurance sector view the possibility of a no-deal scenario?

GT: Many of our brokers are very concerned, some business models have been built and are established around passporting.

Many annual contracts are being issued right now then will run into 2021 when the proposed transition period is due to expire. There are also issues around longer term policies like legal indemnity insurance. If future access to EU customers or risks is to be based on the existing equivalency provisions, it would be a ‘no use to us deal’ as far as brokers are concerned, as it would have the same effect as a ‘no deal’.

When the UK leaves the EU, our members want a future trading agreement to be put in place with the EU that provides frictionless trade for the full range of financial services MIM: Has the UK insurance industry been adequately consulted/ involved in the protracted negotiations?

GT: BIBA has been very active in outlining our concerns from the very start to Theresa May when she was Prime Minister, to Boris Johnson subsequently, as well as the City Minister and all the relevant officials across Whitehall. Our Manifesto clearly outlines our concerns.

MIM: Owing to the level of regulation and interconnection between the UK and EU financial systems, what’s the risk of policies signed pre-Brexit becoming invalid?

GT: There is a risk that we have flagged with officials, it is a hot topic for discussion at our Brexit committee, the transition period is very short and ideally we would like any new deal to dovetail with the expiration of any transition period. Preparing for a no deal scenario at the end of January 2020, a few (but not all) EU countries made provision for run-off periods (all for different lengths of time), so the extent of the risk varied by member state.

MIM: Alternate Swiss and Norwegian models demonstrate good examples of operating in Europe but out of the EU, will the UK be able to create a bespoke model?

GT: It is certainly our wish that Government succeed in signing a bespoke new trade agreement that covers the full range of financial services. Many column inches have been written about the pros and cons of both the Norwegian and Swiss models, so a bespoke deal needs to be the aspiration.

Graeme Trudgill

is Executive Director and a member of the main board at the British Insurance Brokers’ Association (BIBA).

BIBA has been very active in outlining our concerns from the very start to Theresa May when she was Prime Minister, to Boris Johnson subsequently, as well as the City Minister and all the relevant officials across Whitehall MODERN

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INTERVIEWS

Brexit:

greater clarity – greater autonomy Matthew Francis leads KPMG UK’s insurance regulatory technical team and provides assurance and advice to insurers in relation to understanding, and dealing with, the impacts of regulatory change on their business strategies and structures. He has spent the past three years advising a range of life and general insurance companies, reinsurers and intermediaries with operations within and outside the EEA on their Brexit preparations. Here he talks to Modern Insurance about the ramifications of Brexit on the UK insurance sector.

MIM: What does ‘Get Brexit done’ mean to the insurance sector?

MF: It means greater clarity over the future trading relationship with Europe. The political declaration points to both regulatory autonomy and the ‘equivalence’ framework as a basis for future trade in insurance and, more broadly, financial services.

Regulatory autonomy means the UK will be able to make its own rules. Whilst that means that the UK can diverge from the EU rules, the UK government has already passed legislation to adopt EU laws in order to bring regulatory certainty in the short term.

Equivalence involves an assessment of another country’s regulatory standards. The equivalence assessments are due to take place at the end of June 2020, but either party (UK or EU) could subsequently withdraw a positive decision they make, if it so chooses.

Thinking more broadly outside the market access points and the ability to change rules, insurance companies have been affected to varying degrees by a whole host of other subjects. Things like crossborder data flows, the employment of EU nationals within their businesses, issuing green cards and communicating with customers.

Many brokers and insurers have had to assess the economic consequences of Brexit. For example, understanding the potential market volatility of a no-deal Brexit scenario, reviewing the adequacy of cover for customers’ businesses, and what it will mean to impose tariffs on imports.

Lots of people have heard of the term ‘equivalence’, but it can mean many different things to different people, and what it means in practice to the insurance industry is key 18

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…many UK firms decided to establish separate companies in the EU, in order to preserve access to European markets. Others have conducted cross-border transfers of existing books of business MIM: What has been the impact of the Brexit preamble on UK insurers so far?

MF: On the 31st December 2020, at the end of the transition period, the withdrawal agreement will put an end to the access of UK firms to the Single Market using so called ‘passporting rights’. The EU has emphasised the UK cannot be outside the Single Market and enjoy the same benefits as a member. This has prompted the European and UK firms to reassess their strategies and structures, their distribution channels and their operating models. As a result, many UK firms decided to establish separate companies in the EU, in order to preserve access to European markets. Some have also conducted cross-border transfers of existing books of business.

We’ve been supporting businesses from across the board. Both on the European side, with insurers trying to access the UK, and on the UK side with insurers trying to access Europe. The UK insurers were quick to recognise that losing their passporting rights may be a problem. However, it took the European firms slightly longer to realise this potential issue and that they would need to develop some contingency planning around this. Nevertheless, it must be noted that the vast majority of the market is in a good place having implemented their plans.

MIM: Post-Brexit, will the EU Single Market still be important to UK insurers?

MF: There are two different aspects to consider with this question.

For those UK insurers that have set up a separate company in Europe, the new company will still work within the Single Market, therefore anything that happens in the Single Market will affect those platforms. But arguably, for UK insurers that are focused on the UK markets exclusively and do not operate in Europe, access to the Single Market wouldn’t have had much importance in the first place.

MIM: Owing to the level of regulation and interconnection between the UK and EU financial systems, what’s the risk of policies signed pre-Brexit becoming invalid?

MF: Last year, each of the national competent authorities and each member state, confirmed that they would comply with a recommendation from EIOPA, calling for a legal framework or mechanism for facilitating ordinary run-off of business which becomes unauthorised. Following this recommendation, a number of jurisdictions have legislated for Brexit run-off regimes, but these vary greatly in scope and duration. For example, a threeyear run off period is available in Ireland, whilst Spain has only permitted a 9-month period. Clearly, some of these would be insufficient for long-tail lines of business.

France has also indicated it will not comply with ‘Recommendation 6’, which relates to UK expats who have taken out UK policies and have now moved to France. The French regulator has therefore encouraged affected UK insurers to apply for a French passport so they can enter into the French run-off regime.

Where run-off regimes appear insufficient, a number of insurers are already conducting cross-border transfers of existing portfolios. This avoids the risk that an insurer might conduct regulated activities through servicing a policy when it no longer has the permissions to do so.

MIM: Once the UK leaves the EU, it will no longer have to comply with the stringent ‘one size fits all’ Solvency II regulations – advantage or a disadvantage?

MF: It’s difficult to characterise it as an advantage or disadvantage. Clearly having the ability or flexibility to update the UK framework, will mean that the UK regulator will likely face renewed calls from industry and the Government to adapt the framework to better reflect the characteristics of the UK market.

At the same time, the UK regulator will want to balance these interests, with its commitments to robust prudential rules in line with international standards. Divergence from Europe’s rules might also make it more challenging to justify the ‘equivalence’ decision that Europe would make. However, we must be careful that the UK does not become a de facto rule taker of institutions where its interests are not represented.

MIM: Alternate Swiss and Norwegian models demonstrate good examples of operating in Europe but out of the EU, will the UK be able to create a bespoke model?

MF: The UK insurance market is the 4th largest market in the world. The French, German and Italian markets rank in the ‘top 8’ markets globally. Therefore, it’s important that the future trade agreement is tailored to fit the specific trading interests of the UK and Europe. Neither the Swiss nor Norwegian models would be available to the UK due to the UK’s red lines. What’s more, the EU-Swiss financial agreement on non-life insurance, that secures market access more akin to passporting, took several years to negotiate. I believe the real question is whether such a tailored model could be agreed during the transition period, and what wider trade-offs might be required in order to benefit from that preferential market access.

MIM: What will it mean if the EU decides to grant equivalence to the insurance industry?

MF: Lots of people have heard of the term ‘equivalence’, but it can mean many different things to different people, and what it means in practice to the insurance industry is key. If the EU decides to grant us equivalence, this will mean three things for insurers. Firstly, where a UK insurance group (HQ in the UK) has a European subsidiary, then equivalence would allow the European supervisors to rely on the Prudential Regulation Authority to act as the group supervisor.

Secondly, where a European insurance group has a UK insurance subsidiary, that UK subsidiary could be included within a European group’s solvency calculation on a local basis.

Thirdly, where insurers in the EU cede business to a UK reinsurer, equivalence will mean that the EU insurer would treat reinsurance exposures to the UK insurers similarly to EU exposures.

Lastly, it is important to note that there is no equivalence available to brokers, and it is not a substitute to passporting rights.

Matthew Francis

is an Insurance Director at KPMG UK.

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Insurance, risk financing and development Mark Carney is an economist and banker. He holds Canadian, British and Irish citizenship and is the current Governor of the Bank of England.

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Mark Carney, the outgoing governor of the Bank of England, has accepted the role to be Boris Johnson’s finance advisor for this year’s COP26 climate change conference which will be held in Glasgow in November 2020. The conference will discuss “ambitious ways in which the world can lower emissions to keep global temperatures below 1.5 degrees of warming.” Recently, Carney spoke at event in New York on the subject of ‘Insurance, Risk Financing and Development’.

Modern Insurance reports on the key points.

Mirroring the theme to be discussed at COP26, Mark Carney spoke about the role of insurance in smoothing the transition to a 1.5 degree world.

“This sector brings three things: expertise, money and perspective and those are all crucial in helping society adjust to the reality of that transition.” He continued, “And my message is, whether it’s reducing the protection gap, financing resilient infrastructure or improving reporting, risk management and return optimisation across the financial sector, the insurance industry has a unique contribution of over $30 trillion of large capital, deep risk management expertise and long-term perspective.”

Carney said that insurers are well aware that the physical risks of climate change are being felt across the globe with a plague of extreme weather events. “The human costs are immeasurable,” he said. “The financial losses, however, can be measured and they are significant. Insured losses in 2018 were $80 billion, double the inflation-adjusted average for the past 30 years.”

Protection gaps in low and middle income countries meant that even greater costs were being borne by the uninsured, Carney said, and in 2017 the record $140 billion of insured losses were eclipsed by an additional $200 billion of uninsured ones. In some of the countries most exposed to climate change – Bangladesh, India, Vietnam, Philippines, Indonesia, Egypt and Nigeria – insurance penetration is under 1%.

Carney emphasised that the potential economic benefits of closing the insurance gap are striking. He said: “Lloyd’s of London estimates that a 1% rise in insurance penetration can translate to a 13% reduction in uninsured losses and over 20% reduction in disaster recover burden on taxpayers. Substantial macroeconomic benefits include increased investment, higher output, potentially up to 2% of GDP, and greater climate resilience.”

Despite this prize, progress is proving stubbornly slow, Carney said, and over the past 30 years the gap has narrowed by only from 78% to 70% globally, underscoring the importance of the Insurance Development Forum’s (IDF’s) work.

Insurers are well aware that the physical risks of climate change are being felt across the globe with a plague of extreme weather events

The role of insurance for adaptation and resilience When asked what should be done, Carney said both sides of insurers’ balance sheets needed to respond. He stressed that on the liability side, the focus must be reducing the protection gap and supporting the resilience of households and companies to growing climate risks. He said: “Better understanding of past losses can obviously help. Projects like the open-source Oasis Loss Modelling Framework of the IDF are leveraging the expertise of the private sector, the public sector, and academia, to improve the data available for risk analysis in low and middle income countries.”

He emphasised that new products, such as insurance-linked securities based on parametric triggers, are vital to help reduce macro protection gaps and increase resilience. These are generally cheaper to structure and administer and more efficient to blend with commercial finance if required, he said. “Of course, increasingly climate-related tail risks could prove uneconomic for private sector insurers to cover. That is where development agencies and Multilateral Development Banks can step in. Disaster reinsurance could be one of the most effective uses of development financing.”

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INTERVIEWS On the asset side, infrastructure investments will be essential.

And to transition to net zero, all countries need to step up their investments in sustainable energy. “The reality of climate change also means that all countries, but particularly developing and emerging economies, will need to invest in new climate-resilient infrastructure in order to adapt to the new realities of a hotter and more volatile climate.”

There are various estimates, all enormous, ranging between US$70-90 trillion over the next decade, three quarters of which are in emerging and developing economies, so it’s imperative to act now, Carney said, to create practical tools and frameworks to support climate-resilient infrastructure investments, ranging from broader use of catastrophe bonds to greater risk pooling for the most vulnerable countries.

“Climate-resilient infrastructure assets are well suited to life insurers that need reliable returns over long-term investment horizons. This is even more compelling in a low-for-long interest rate world. However, as the IDF infrastructure has flagged, at present only 2.5% of insurance assets managed are allocated to infrastructure.”

The world needs much more investment in infrastructure, and greater risk sharing of climate risks, said Carney. “Insurers have a unique ability to meet both needs. In this context, the impact of regulation on the provision and cost of infrastructure finance must be carefully considered. As World Bank studies have shown, there is evidence that infrastructure debt can be lower risk as it has more predictable and stable long-term cash flows and has low correlation to other assets.” He added that the historical default

The financial system will reward companies that adjust and punish those who don’t, he said, and insurers can be highly influential in bringing the realities of climate change into mainstream financial decision-making experience of infrastructure debt suggests a ‘hump-shaped’ credit risk profile, which converges to investment grade quality within a few years after financing has closed.

However, such robustness is not reflected in the standardised approaches for credit risk in most regulatory frameworks, according to Carney, and the World Bank study suggests that capital charges could decline significantly for a differentiated regulatory treatment of infrastructure debt as a separate asset class. He said: “Now, the International Association of Insurance Supervisors (IAIS) is reviewing the data sources and gaps and considering the risk case for a differentiated capital treatment for infrastructure under the global Insurance Capital Standard – ICS 2.0.”

Carney stated: “We also need to develop the conditions to make infrastructure assets more readily investable and more easily tradable. Under the Argentine G20 presidency last year, with support from the World Bank and OECD, the G20 designed a roadmap to make infrastructure a more coherent asset class.

The foundation is greater standardisation through greater commonality in terms, conditions and financial frameworks. This allows the assets to become easier to invest in, easier to insure, and project risks to be better managed.”

In Carney’s opinion, data on the input and impact of infrastructure projects can also be improved. “For instance, data on project phases would allow comparisons across construction phases of infrastructure versus non-infrastructure assets”, he said. “And information on the types of concessions and licenses offered in different regions are important as they determine the kinds of revenue arrangements for infrastructure projects, which ultimately influence cash flow stability, critical information for investors. The IAIS is developing a workplan to examine these data gaps in the coming year.”

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Reporting, risk management and return

Turning to mainstream investing, Carney said that changes in climate policies, technologies and physical risks in the transition to a net zero world will prompt reassessments of the value of virtually every asset. The financial system will reward companies that adjust and punish those who don’t, he said, and insurers can be highly influential in bringing the realities of climate change into mainstream financial decision-making.

To do so, he said, there needs to be a step change in three areas: reporting, risk management and return.

Reporting

Carney said that better corporate disclosure of climate-related financial risks is essential and the next few years will be decisive.

On the demand side, current supporters of the Task Force on Climate-related Financial Disclosures (TCFD) are responsible for assets totalling $120 trillion and include the world’s globally systemic banks, top 10 global asset managers, leading pension funds, and insurers.

“Not surprisingly, supply is responding,” Carney said. Users of capital are providing increasingly sophisticated decision-useful information. Four-fifths of the top 1,100 G20 companies surveyed in a recent TCFD report are now disclosing climate-related financial risks in line with the recommendations.”

Carney suggested that now is the time to get involved. The IAIS and UN Sustainable Insurance Forum are monitoring developments in disclosures closely: with a systematic survey of TCFD adoption by insurance firms and they will be publishing a paper on this early next year, including recommendations for any changes. The Climate Change Research Initiative (CCRI) will do the same.

The next step, according to Carney, is to make these disclosures mandatory. “The UK and EU have already signalled their intents.

But it’s time for every country to get involved because the world won’t get to net zero if the financial sector doesn’t know how our companies are responding. To watch we must be able to see.

And over the next two years, the current process of disclosure by the users of capital, reaction by the suppliers of capital, and adjustment of these standards, will be critical to ensure that the TCFD standards are as comparable, efficient and as decisionuseful as possible.”

Risk management

Carney went on to say that with better information, the frontier will be to upgrade risk management and optimise returns. “As the supervisor of the world’s fourth largest insurance industry, the Bank of England knows that general insurers and reinsurers are on the front line of managing the physical risks from climate change.” He added that insurers have responded by developing their modelling and forecasting capabilities, improving exposure management, and adapting coverage and pricing. “In the process, insurers have learned that yesterday’s tail risk is closer to today’s central scenario.”

“The Bank will develop the approach in consultation with industry, including best practice insurers, and other informed stakeholders including experts from the Network for Greening the Financial System and the PRA’s Climate Financial Risk Forum.”

Return

Carney next addressed the increasing evidence that sustainable investment can generate excess returns, particularly for investors, like insurers, with longer term horizons. One of the biggest hurdles to channelling mainstream finance to sustainable investment, he said, is the inconsistent definition and measurement of environmental, social and governance (ESG) criteria. “An agreed taxonomy would allow markets to understand better where there is real outperformance and direct investments accordingly.”

He said: “The EU’s Green Taxonomy and the Green Bond Standard are good starts but they are binary, dark green or brown, and don’t account for progress from brown to green – progress that could make a significant contribution to our climate goals.

However, one possible solution, as recommended by the UN’s Climate Financial Leaders Initiative, could be the development of transition indices which track companies in high-carbon sectors that adopt low-carbon strategies. Such approaches are essential for our citizens to make sure their money is being invested in line with their values.”

Conclusion

Ultimately, the speed with which the new sustainable finance develops will be decided by the coherence and credibility of countries’ climate policies, Carney said. “Finance will complement, and potentially amplify these initiatives, but it will never substitute for climate policy action. The 20 countries, including the UK, that have plans to legislate for net zero show what can be done. And if countries build their track records, their credibility will grow, and the market will allocate capital to deliver the necessary innovation and growth and pull forward the adjustment to a low carbon future.”

Carney concluded: “The more prolific the reporting, the more robust the risk management and the more widespread the return optimisation, the more rapidly the insurance sector can build resilience while promoting the transition that our citizens demand.”

Insurers have responded by developing their modelling and forecasting capabilities, improving exposure management, and adapting coverage and pricing

He continued: “And leading insurers also understand that the breadth, magnitude, and foreseeable nature of climate risks, mean the biggest challenge will be to assess the resilience of firms’ strategies to transition risks. That’s why, the Bank of England set out our supervisory expectations for banks and insurers regarding their governance, risk management, strategic resilience and disclosure of climate-related financial risks. And in June 2019, the Bank announced that we will be the first supervisor to stress test our financial system for resilience against different climate transition pathways, ranging from early and orderly to late and disruptive.” The test, Carney insisted, will motivate banks, insurers and asset managers to address data gaps and to develop cuttingedge risk management approaches consistent with a range of possible climate pathways.

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The ClimateWise physical and transition risk frameworks

Dr Bronwyn Claire is Senior Programme Manager for ClimateWise at the Cambridge Institute for Sustainability Leadership. She joined CISL from KPMG, where she spent 7 years working with insurance companies and banks in Australia and Hong Kong to improve risk management and internal controls. Here she gives Modern Insurance an insight into ClimateWise and the role it’s playing to address climate change and its effect on the insurance industry.

Climate change is altering the strategies and approach of the insurance market.

The insurance industry landscape is transforming due to more severe and frequent weather events as well as government policies designed to manage the transition. The ripples through the supply chain supporting insurance are also becoming increasingly apparent.

ClimateWise is a group of 26 leading international insurance firms and associated bodies, convened by the University of Cambridge Institute for Sustainability Leadership. The ClimateWise Insurance Advisory Council has published two frameworks in the last year that provide practical open-source tools to address the primary risks posed by climate change to the financial sector: physical and transition risk. These frameworks enable finance sector firms to respond to the expectations of the Bank of England (BoE) and recommendations of the Financial Stability Board Taskforce on Climate-related Financial Disclosure (TCFD).

In its supervisory Statement SS3/19, the PRA reports that few firms are addressing physical and transition risk strategically.

The PRA now expects firms to embed climate change issues into governance; integrate climate risk into existing financial risk management practices; use scenario analysis to inform both of these and disclose their risks and their approach to mitigation.

The following are the main areas of focus for the insurance industry and the connected supply chain, as researched and reported on by ClimateWise and our members.

Physical impact of climate change The physical impact of climate change can be seen around the globe. Extreme

weather events – such as the Doncaster floods in November, which are estimated to cost insurers £80m-£120m – are only set to become more common as storm frequency increases. Of the 17 record breaking rainfall months logged by the Met Office since 1910, nine have occurred in the past 19 years, with significant increases in coastal flood risk projected to occur as early as the 2020s, due to heightened storm frequency. The bush fires raging in Australia after persistent dry spells and heatwaves now encompass a greater landmass than Ireland. Localised flooding, flooding of coastal regions, wildfires and damage to infrastructure are expected to increase, with measures for rail and road infrastructure already considered.

The growing intensity of weatherrelated events and the scale of potential disasters due to climate change presents a significant challenge for insurers. The scope extends beyond flood and fire, as water scarcity and food insecurity are likely to be aggravated by climate change.

The development of accurate national and regional forecasting abilities is essential for the insurance industry to price risk appropriately and build capacity for risk management within society. Building and re-building cities resilient to climate change will require altering the materials and approach of construction and building maintenance through the climate modelling and policy design of insurance.

As climate change moves from a scientific consensus to an observable reality, so too do physical risks become material impacts. These impacts are set to rise in the period to 2050 regardless of global efforts to reduce carbon emissions. This has profound implications for people’s lives and livelihoods, the global economy and financial stability. The ClimateWise Physical risk framework, published last

The growing intensity of weather-related events and the scale of potential disasters due to climate change presents a significant challenge for insurers 24

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February, used two established catastrophe models to analyse the impact of both 2C and 4C warming scenarios on 12 real estate portfolios from around the world with a total market value in excess of £2 trillion. As well as revealing the tremendous scale of risk climate change poses to property, the report demonstrated effective forms of mitigation and the relevance of insurance industry modelling tools and expertise in understanding the longer-term climate impacts on real estate lending and investment portfolios.

The analysis revealed that, under a 2C scenario, the number of UK residential properties at risk of flooding could rise 25 per cent by 2050 and the associated Average Annual Loss (AAL) from residential mortgages could increase 61 per cent. These figures increase to 40 per cent and 130 per cent respectively in a 4C scenario. Commercial property assets will also experience increased losses of up to 70 per cent. Property portfolios outside the UK exposed to tropical cyclone risk, such as in the US, could experience losses of up to 80 per cent. These losses would be heavily clustered in more exposed areas, posing greater losses for some firms than others, and protection gaps would expand from the global $80bn already estimated by some.

Taking this framework forward, ClimateWise is partnering with Somerset County Council to carry out a study estimating the exposure posed by climate change in the municipality, the potential protection gaps that may result, how the insurance industry might respond and the opportunities for adaptation. This puts in motion the ClimateWise ambition of establishing a roadmap for adaptation on the municipality level. Somerset has been actively engaged in building the municipality’s resilience following severe flooding in 2013/14 through adaptation works carried out by a range of civil agencies and infrastructure operators, as well as improved flood response plans. Somerset is now considering how to further improve their resilience and would be interested in exploring the value of adaptation from the insurance sector’s perspective.

INTERVIEWS

The bush fires raging in Australia after persistent dry spells and heatwaves now encompass a greater landmass than Ireland

Going forward, ClimateWise is ensuring the framework’s existing Risk exposure matrix is kept up to date and, in 2020, will be extending the framework to cover new sectors and new geographies Contribution of regional adaptation and insurance to climate resilience The next phase of physical risk research for ClimateWise builds on the resilient cities toolkit to identify opportunities and establish a business case for products and services for resilient counties from the broader perspective of infrastructure operators, other businesses, communities, local and national government, emergency responses, and insurance industry agents such as Flood Re. The project would be based on a regional case study and include workshops with local actors and key stakeholders in order to investigate, document and if possible, demonstrate the value of regional level adaptation and the implications for the availability and design of insurance products. The intended outcome of the project will be a summary of the process undertaken to understand county asset exposure to physical climate risks and the role of adaptation and insurance in risk management.

Transitioning to low carbon In December, at COP25, Mark Carney announced the BoE was “exploring pathways to make TCFD disclosure mandatory” by COP26. With regulation now imminent, ‘green’ and ‘brown’ industries, as well as their supply chains more broadly, need to be aware of the potential re-pricing of carbon-intensive assets and the speed at which re-pricing might occur.

These transition risks – as the economy shifts towards a low or zero carbon model – were addressed in the ClimateWise Transition risk framework. The framework was drawn up to support investors and regulators in assessing how the transition to a low-carbon economy will affect the

financial performance of infrastructure investments, which are a significant asset class exposed to transition risk. The open source model and accompanying guide provide a practical tool for Chief Investment Officers, asset managers and owners, regulators and the wider financial community – allowing them to cross check the assumptions behind the outputs and adapt in house models according to the results. The framework comprises three steps designed to enhance understanding of: • Transition risks and opportunities at the portfolio level • The impact of transition risk on specific assets • Financial modelling analysis enabling the quantification of potential impact on asset returns Going forward, ClimateWise is ensuring the framework’s existing Risk exposure matrix is kept up to date and, in 2020, will be extending the framework to cover new sectors and new geographies. The sector of real estate has been identified as a key addition to the energy and transport infrastructure focus, with the sub sectors for real estate being cement and steel, being both retrofitting and construction.

Additional geographies identified have focused on Asia, and particularly China, to complement the EU, USA and India.

Currently the model includes a Business as Usual (3.7C), Paris Agreement (2.7C) and 2C scenario, with additional data to model scenarios for a wider range (1.5C and 6C) being investigated.

Dr Bronwyn Claire

is Senior Programme Manager for ClimateWise at the Cambridge Institute for Sustainability Leadership.

About ClimateWise ClimateWise is a global network of 26 leading insurers, reinsurers, brokers and industry service providers sharing a commitment to reduce the impact of climate change on society and the insurance industry.

ClimateWise is a voluntary initiative, driven directly by its members and facilitated by the University of Cambridge Institute for Sustainability Leadership (CISL), which brings business, government and academia together to identify solutions to critical sustainability challenges.

About the ClimateWise Principles In December, ClimateWise published its Principles Independent Review report for the 11th year, with the ClimateWise Principles now fully aligned with the TCFD recommendations. In the report, ClimateWise members set the industry’s most rigorous standard of disclosure – highlighting both where the industry is performing well and where it must focus going forward. This year showed that members are leading the sector in integrating internal risk analysis and management procedures.

This includes underwriting tools to monitor physical risk and weighting the carbon intensity of investments. However, building on this by advancing the use of scenario analysis through the supply chains of associated businesses will be necessary for any industry leaders in the future, as will greater application of new research and insurance products to business practices.

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EDITORIAL

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A call for clarity Since the FCA (Financial Conduct Authority) introduced transparency requirements on motor renewal documents, what impact has this had on the market, and what will the effects in 2020 be?

The transparency requirements were a further sign that the FCA weren’t happy with how some insurers and intermediaries were approaching pricing. As a result they should have been recognised as something we all needed to fully adopt, not just in compliance, but also in spirit, moving to a much more open approach than our previous reputations suggest.

Sadly, I know from meetings I’ve attended with the regulator present, that they have been disappointed with the industry response. As a result, we will likely see the imposition of ‘remedies’, which could have unfortunate side effects.

The requirement was to show the last year’s premium, as well as pointing out that a cheaper quotation might be available if you were prepared to shop around. The obvious take out from understanding that the FCA are disappointed with our response, is that some of us felt that revealing such basic information might lose us business and we valued higher retention rates more than helping our customers trust us and making our regulators happy.

The simple response to the question above should have been: “It will probably encourage a bit more shopping around but nothing too dramatic”. Instead, in 2020 we will see more impactful changes.

The regulator feels the Consumer Association ‘Super Complaint’ made some people think they hadn’t done enough, and that combined with an occasional tardy response from some insurers, gave them every reason to hit us hard.

The ABI has done well to show that not all insurers are the same and the introduction of ‘Guiding Principles and Action Points’ was a major step forward. However, even one bad apple will probably be enough to justify regulation. In 2020 we could see remedies ranging from a complete ban on Auto-Renewal, through to limiting - by a percentage or pounds amount - the level of increase that can be applied at renewal. That latter approach will be hell to implement, how can you differentiate a ‘Price Elasticity’ increase (to recoup losses from a discounted premium in the first year), from a true change in risk?

Banning Auto Renewal seems a firm favourite, but we need to be highlighting the unintended consequences. A substantial increase in uninsured motor vehicles is an obvious risk, and drifting away from motor, people forgetting to renew household insurances, suffering a large fire or flood, and finding themselves completely unprotected.

So, an interesting year 2020, with consequences that could probably have been avoided if some of our market colleagues had been less greedy in the past. We need to do better.

David Williams,

Managing Director, Underwriting & Technical Services, AXA Insurance (UK).

Happy employees make happy customers In your opinion, what is the definition of employee engagement, and what activities can be undertaken to create continuous focus?

Employee engagement is the level by which employees feel pride, enthusiasm and loyalty working for an organisation. The aim is to nurture a workplace environment whereby employees thoroughly understand every customer’s specific needs and wants, and are happy, motivated and empowered to deliver exceptional levels of service, bringing the company’s values to life at every customer interaction.

Every year we survey our people to get to the heart of what matters most in their working lives, focusing on the key areas of leadership, wellbeing, fair deal and giving something back. The results highlight what we do well, pinpoint the areas we need to improve in order to continue to be ‘a great place to work’ and provide an external benchmark against other employers in the UK. We then plan employee engagement projects accordingly.

Over the last 18 months, we’ve delivered some key activities to drive a culture where employees continue to feel happy, valued and engaged: • Company Values: Invited employees to define our company values and embedded these into objectives so that our people are measured on ‘what’ they deliver and ‘how’ they do it.

• Recognition: Launched our monthly recognition scheme to celebrate and reward individual contribution.

• Rewards package: Reviewed pay structures and reduced full-time contractual hours.

• Leadership: Improved the visibility and accessibility to Senior Management and Directors.

• Business Awareness: Introduced Learning Bytes sessions to improve cross-functional knowledge, insight and collaboration.

• Communication: Improved multi-channel communications so employees hear business news first-hand.

• Personal Growth: Created platforms for progression through agile working, broadening of roles and creation of new opportunities.

• Talent Pool: Recruited skilled individuals and industry experts to further support innovation, expertise and excellence.

• Voice of the Colleague: Driven a culture where people freely question, challenge and make decisions for the benefit of our customers.

When commitment to continuously listen, learn and take action against employee feedback is embedded in a ‘People’ strategy, statistics show that those companies are more likely to have happier employees, which in turn is more likely to improve customer relationships. Simply, happier employees make happier customers, a fundamental aspect of business success.

Andrew Chandler, Sales Director, FMG.

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Claims in 2020 – people and technology The insurance industry hasn’t moved especially quickly in adopting technology trends, however the last decade has seen increasing application of AI, machine learning and robots both in customer facing and back office operations.

Insurance organisations frequently hold great deals of data about their customers, lifestyles and habits, locked up in large structured databases. AI gives the ability to make sense of unstructured data, gathered from multiple information sources, which is helping insurance organisations better anticipate customer needs by combining data in new ways.

In our world of claims handling, AI is becoming more evident in use for diagnosis, which speeds up resolution for the customer. There has been a shift in thinking, or perhaps you could say a realisation, that people, the human touch, can be enhanced, rather than replaced by technology, and that will certainly be a feature of our own developments through 2020.

Rather than consolidating roles from human to artificial intelligence, we believe 2020 will see more organisations investing in new data support mechanisms in claims which enable faster and better decision making. Whilst automation in claims may have some applications, we definitely can’t replace our people. It is clear that the uncertainty

and concerns customers face in a claim are only eased by talking it through with an experienced and empathetic person.

However, once the information is gathered, reassurance and understanding achieved, we need to move fast. Greater efficiency in claims handling is driven out of shortening the claim cycle and preventing unnecessary work or delays. Knowing exactly the extent of damage and how best to help at first contact is a key theme for us which we refer to as first call resolution.

2020 looks like it will be more about collaboration and less about disruption from new technology. Insurtech has shifted more towards supporting existing channels and working with the large incumbents in the market.

Whilst the biggest organisations have immense amounts of data compared to smaller players, it can be hard to overcome some technology challenges due to scale. We are sure to see the continuation of increased outsourcing and development of likeminded eco-systems in smaller, more agile businesses where we can test and learn very quickly.

Jason Tripp,

Managing Director, Coplus.

Get it right Do you think an April 2020 deadline is realistic for implementing the whiplash reforms relating to road traffic accidents?

My real fear is that the Ministry of Justice is going full steam ahead for implementation of the reforms in April 2020, when it really, really shouldn’t. When senior figures in the insurance industry - the same proponents who have been banging the drums for the reforms for years - say that unless the crucial issues are resolved and the problems fixed , it should be delayed, it must be time to listen.

MIB’s building of the new Portal has continued unabashed and although later than originally envisaged, they have recently reported that the testing process has gone well. The secondary legislation has pretty much been drafted and whilst there may be some further lively debate, particularly in the House of Lords, it would sail through Parliament unhindered. We do not really know what progress has been made with preparing the accompanying rules and pre-action protocol, but presumably with a degree of urgency and political will they can be delivered.

If for one moment we put to one side the argument that the new claims process remains deeply and structurally flawed, we know that there still some serious issues to be addressed. The conundrum of how to deal with mixed or multiple injuries has yet to be solved.

There are legitimate concerns about what happens when a claim is disputed, and the details of how the ADR process will actually work in practice are yet to be worked out.

A half-baked new claims process will only be storing up problems for the future. The prospect of increased satellite litigation and legions of confused and bitter claimants who will expect support from their insurers but risk being disappointed is more than likely. We will see an increase in fraud and gaming the system. Costs shifted onto rehabilitation, credit hire and repair. Increased front-end costs, issue around duplication and little support for self-litigants.

So, whilst they certainly could proceed in April, they most certainly shouldn’t. It is an unnecessary political timetable with little or no imperative for a rushed implementation. If it must happen, fine, but let us get it right from the outset.

Donna Scully,

Director, Carpenters Group.

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Sustainable insurance solutions The 25th Climate Conference in December saw over 25,000 politicians and experts from 190 countries gather to discuss the pressing issue of climate change. With greenhouse gas concentrations reaching record levels1, UN Secretary António Guterres even spoke of ‘the point of no return’ for the planet.

Sustainability is high on most corporate agendas, with companies under pressure to identify methods to reduce their environmental footprint, and develop more eco-friendly products and solutions. The insurance industry is no different; in 2017, ClimateWise reported a climate risk protection gap of US$1.7trn caused by years of extreme weather and called upon the industry to explore ways to address this.

Opportunities for insurers exist not just through proposition development but also through the claims lifecycle. Recent initiatives in the claims process have explored repair techniques rather than replacement across multiple lines of business, including property and motor. This has the joint advantage of reducing waste sent to landfill and limiting the strain placed on natural resources for the sourcing and/or production of new parts.

In the commercial property space, the expertise of specialist restoration companies can be leveraged for engineered surface damage repairs on a variety of items, from wooden surfaces to UPVC windows. Allianz has partnered with one such company, Plastic Surgeon, who reported that ‘of all cases presented to them, only 16%

of items were unrepairable’.2 This process has the further benefit of achieving cost and time efficiencies in the claims settlement process.

Another example - this time across motor lines - is the use of ‘green parts’ (undamaged, reusable components from end-of-life vehicles) for certain insurer-funded motor repairs. Once viewed distrustfully as inferior, attitudes to green parts are now becoming favourable, with the knowledge that they are sourced from equivalent vehicles and from an original equipment manufacturer (OEM), so the provenance can be clearly tracked. Since these parts are only used with the vehicle owner’s full consent and are subject to careful inspection and grading, policyholders can be reassured of no difference in performance or appearance. Opting for a green part over a brand new replacement may even speed up the repair process, with repairers often able to source readily available parts rather than rely on international supply chains. This may become even more pertinent depending on the outcome of Brexit and its impact on frictionless trade.

Emerging trends, such as electric and autonomous cars, plus connected home devices are also contributing to a more sustainable future. There is much more to do but insurers are paving the way for customers to be able to make greener, more sustainable choices at work and at home.

Graham Gibson,

Chief Claims Officer, Allianz 1. https://www.bbc.co.uk/news/science-environment-50504131 2. https://www.plastic-surgeon.co.uk/blog/insurance/restoration-vs-replacement-forinsurance-claims#

What do you think will be the defining trend for your business in 2020?

The Future Isn’t What It Used To Be

2019 has seen the most unprecedented advances in technology in our history, with exponential growth anticipated in 2020. To keep abreast of contemporaneous tech we attended Web Summit, one of the largest global meetings for the technology industry. Google, IBM, Microsoft, Amazon; pretty much every tech giant, the European Commission plus delegates from over 160 countries took part.

Described as “where the future goes to be born”, it gives a great insight into new products and more than a glimpse of tomorrow.

One overriding theme that intertwined so many industries and products was artificial intelligence (AI). A wide ranging subject encompassing everything from machine learning to autonomous cars and robotics. Originally the domain of only deep-pocket tech behemoths now widely adopted by a myriad of firms the world over.

Man’s imagination is now the only limitation to its use.

Laird’s Tech Journey

Laird’s AI journey started in 2015 when we made the first steps into automation. Not quite any intelligence in the system at this stage, merely software designed to autonomously follow processes and streams dependent on a number of predefined variables. We developed this software to ensure complete accuracy in our procedures and improve the speed of our service. However, over the course of a

year, and despite our instructions growing by around 10%, we reduced our service staff by over 50% (redeployed elsewhere - don’t hate!).

We are continuing to develop the automation side and have introduced a range of products this year with some AI sitting behind them. For example, we have a chat bot to allow customers to book their inspections outside normal hours, with AI powered natural language; ideal for out of hours, overflow and for people who don’t like, or struggle to speak to other humans.

AI is quickly surrounding us; vehicle manufacturers and insurers have significant AI resources. Suppliers are catching up, accident management companies are steadily integrating systems and even a few solicitors have started using AI. We need to ensure we can collaborate well with everyone.

2020 will see Laird plough more resources into researching and developing our technology and integrations. In particular, we need AI to power more of our automation, so that it learns and understands our functions, actions and our aspirations; I won’t say ‘goal’ as there is no longer an end game, merely steps in the pursuit of betterment or kaizen.

Nik Ellis,

Managing Director, Laird Assessors.

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Keeping up How have customer expectations changed over 2019, and what steps need to be taken to ensure these are fulfilled throughout 2020?

As the world becomes an ever-more digital place, our pace of life has increased in line with our bandwidth. We’re moving faster, working harder and smarter, and utilising the technology at our fingertips like never before. It’s an exciting time.

Of course, as the UK’s market leading service provider of credit hire and post-accident services, we’ve noted that this rapid push to further modernity does not come alone. It also comes with a higher level of expectation from those we are serving – the policyholder, the broker and the insurer.

What is more, all three parties presuppose the claims process to be simple, seamless, and more importantly; speedy. As a company renowned for being a service-driven enterprise focused squarely on those who need us most, the pressure is on to deliver.

As such, our reliance on technology to make the claims process more efficient is growing year on year. It’s paramount we keep up with the customer and the world they live in.

We’ve invested in a new case management system to improve the customer journey through digitisation. We’ve built digital links with our repairers to facilitate real time updates with the policyholder and reduce potential delays. And we’ve tailored our communications to the specific needs of the customer, so we can be in touch in the best way for them.

If they would prefer an update via text message at 10pm to an email at 8am, we can do that. We want to make their experience effortless.

We specialise in keeping drivers mobile after a non-fault accident – getting them back on the road with minimum fuss and maximum empathy. The digital era makes it just that little bit easier, and with a 24/7 customer portal in development, we’re constantly moving at the pace set by our policyholders.

We strive to meet our customers’ demands and our Net Promoter Score (NPS) proves we’re doing a good job. We’re over the moon to witness it at 86 for the fourth month running. And we plan to keep it that way as we push into the new year.

At EDAM, our business strategy is centred around the customer and as their expectations continue to evolve, so shall our ways of working.

Lesley Jackson,

Chief Commercial Officer, EDAM Group.

Building flood resilient communities Rapid urbanisation, increased construction in flood-prone areas, as well as more extreme weather events and sea-level rises are just some of the drivers behind the acceleration of flood-related events. As the impact of floods becomes more significant, this raises a number of long-term challenges. In particular, flood defences have design limits and can be overtopped (even if they don’t fail structurally), meaning they aren’t failsafe and losses can still occur as we witnessed in Doncaster towards the end of 2019.

Flood infrastructure investment, therefore, needs to be part of a wider portfolio of solutions that provides communities with an ongoing flood risk reduction strategy. At the moment, there is still a tendency to build on flood plains and then, after a flood event, build back rather than ‘build back better’ or build forward (or sustainably).

There need to be better incentives to install flood resistant and resilient measures and help better protect properties from future flooding. Insurers have a role to play to support customers when

flooding happens and talk about the value of making homes and businesses more resilient to future floods.

However, the “1 in 100” year flood return period terminology traditionally used by the insurance industry, Defra and the Environment Agency to communicate flood risk might actually make matters worse. It is hard for the general public to tangibly interpret from this information their chances of being flooded. We need to bring this more to life in terms people can understand. For example, a 1 in 100 year flood risk over a 30 year period (the average lifetime of a private home mortgage) equates to a 26% chance of being flooded at least once during those 30 years.

The value of assets including homes, businesses and municipal structures is increasing and so is population density. We also face an uncertain future due to climate change. A holistic, long-term focus that considers flood defences, as well as the role of land zoning, planning, sustainable drainage and green, nature-based solutions in conjunction with a focus on property level flood resilience is urgently needed.

David Nichols,

Chief Claims Officer, Zurich.

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What do you think will be the defining trend for your business in 2020?

The body repair industry, like many other sectors in the UK, has experienced a degree of uncertainty during 2019. Overall, however, it is in fairly good shape and will continue this trend into 2020.

Bottom line discounts and low labour rates are seen by repairers as huge threats, but as the number of repairers has reduced, the independent groups grow through acquisitions and repairer networks become more active. This situation may well improve slightly in 2020. The average labour rate improved slightly from £35.48 to £36.44 in the first half of 2019, which is positive but, compared to mechanical rates, this is still woefully low in such a highly skilled sector. Repairers are looking for labour rates in excess of £44.00 per hour to allow for the investment required in new repair technology and training as well as improving staff pay levels to prevent movement to other, better paid industries. Over half of UK accident repair centres this year are reporting increases in repair volumes with a similar number experiencing slightly higher profitability. The outlook for the next twelve months is positive with 70% of repairers expecting a rise in volumes.

If we look at how the UK body repairers are organised, out of 2,850 primary bodyshops (companies whose primary business is accident damage repair and which has fallen by a staggering 25% since 2009), 425 of them are part of independent groups and 228 are dealer owned bodyshops. This leaves around 2,200 stand-alone independent bodyshops who need to compete for repair work with the independent groups and we will continue to see many of these bodyshops being ‘given a voice’ by joining independent networks, a trend which will continue into 2020. These networks are able to put national service level agreements in place on their behalf and insurers, fleet operators and fleet management companies will enjoy other tangible benefits such as the high level of customer services being delivered through a collective owner driver as opposed to a branch mentality. Compared to the largest of the independent groups which still has only 28 bodyshops, these independent networks offer a centrally managed national solution with typically over 200 accredited car, van and HGV bodyshops. In 2020, we will also see bodyshops investing further in equipment and training to repair ever more complex vehicles with collision avoidance systems as well as high voltage drive trains.

Neil Marcus,

Marketing Director, Selsia.

The time to innovate With technology becoming more advanced by the day, what new innovations are we likely to see in 2020?

The claims management arena is a hive of innovation and I fully expect 2020 to be a pivotal year for the sector at large as new technologies become further integrated into every aspect of the claims process.

At the fundamental level, claims management is about the ability to harness data effectively. In 2020, we fully expect to see the use of advanced analytics, predictive modelling and benchmarking contributing to a much more data enriched environment. New technologies, such as machine learning and artificial intelligence, are already helping us to distil both structured and unstructured data into actionable insight and viable solutions for our clients.

Advances in the underlying claims architecture are creating an infrastructure into which new, agile technologies can be integrated much more effectively, and beyond that are facilitating a broader data ecosystem that connects all parties to the claims process. This is a key part of Crawford’s ongoing Claims Fabric program, which is designed to promote much deeper client integration through advanced data insight.

At the individual claims level, the application of Robotic Process Automation (RPA) will further enhance our ability to manage smaller, less complex claims in a much more efficient and cost-effective

manner via automated settlement. On high-volume business, RPA is already significantly reducing claims life cycles and improving the accuracy of claims estimation.

In motor, for example, RPA tools are being used to review images and generate estimates based on the type of vehicle and damage sustained. Such automation simplifies notification and expedites settlement, often saving weeks of manual claim investigation, while Big Data allows estimates to be made with ever-increasing accuracy, resulting in appropriate settlement sums.

At the individual loss site, new technologies - such as electronic site and scoping tools, virtual reality, 3D imaging cameras and livestreaming capabilities - will become more prevalent. Such capabilities create a much more interactive experience and can greatly reduce the time to restoration. Such capabilities are enabling insurers to participate in 360-degree interactive walkthroughs of loss sites, enabling them to make informed judgements based on that data.

The potential for new technologies to reshape the claims process for the benefit of all parties involved is huge. However, for that potential to be successfully tapped there must be a market-wide commitment to investment in and adoption of these innovative capabilities.

Lisa Bartlett,

President, Crawford & Company.

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The SME market represents a major area of growth for insurers, what can the industry do to capitalise on this opportunity?

How many times have you looked at the insurance of a small or medium company and felt that something was not quite right? That the business was being insured for what the owner wanted, rather than what it really needed? If that happens often, you are almost certainly not alone.

There’s no doubt that the small business insurance sector in the UK is under-served, under-insured with data gaps that are holding back data enrichment processes, leading to incorrect pricing and slow processes.

Estimates show that about 70% of SMEs in the UK are under-insured.

For business owners this represents a huge risk, for themselves and for their workforce. Another 32% of SMEs do not have any insurance at all.

Figures quoted by BIBA suggest nearly one in five businesses suffer a major disruption every year. Further research suggests 80% of businesses affected by a major incident close down within 18 months, and 90% of those who lose data or suffer a data breach are forced to close down within two years.

There was general agreement in our recent roundtable with Modern Insurance ‘SMEs–Insuring a Small to Medium Sized Enterprise’: SME owners are often not buying the right product, for several reasons.

Poor collaboration between brokers and insurers does not help, for example, in relation to verified, standardised flood or other perils’

data being shared at point-of-quote. The challenge for managing data is compounded by the fact that SMEs come in so many shapes and sizes, facing many types of risks: property-related, perils-related, people-related or even cyber-related.

There is an opportunity for insurers to advise their brokers about the risks on our books, and to make more information available. The power of a common, shared data platform or data repository is the logical solution to this. The talks at our roundtable show they feel very positive about that. It all comes down to clear roles and relationships for the data, and what works in the interests of the customer.

At the moment, with the available technology and the level of customer knowledge, an entire digital journey cannot completely serve the whole small commercial insurance market.

It’s important to remember that for micro-businesses and the smaller end of the commercial market, it is all about convenience and speed.

This is a sector that can be better served by making more business data available at point-of-quote.

Data enrichment - by building databases and having property data, business data, and motor and vehicle data - does help the automation and digitisation of the industry. With access to data you can make more decisions and you can verify what a prospective business owner is telling you.

Jonathan Guard,

Commercial Insurance Director, LexisNexis Risk Solutions.

Embracing technology for business How can Digital Innovation help a business to better engage with their customers and open up commercial opportunities?

As people increasingly opt for self-service routes to make a claim and prefer to use online or mobile application support services, the digital world offers new and exciting opportunities for the insurance sector.

Most insurers are already well attuned to the shift in customer expectations and are centred on developing and understanding their digital journeys. For suppliers, like Auto Windscreens, the same focus applies and we have seen huge positives from transforming our customer engagement model with the introduction of additional mobile and web-based services.

What we have aimed to do is give policyholders complete convenience, choice and control over their appointments, and more ways in which to self-serve at every step. A new online booking system offers a three-step solution to glass claims, making the reporting of damage effortless. When inputting vehicle registration details, the system automatically recovers policy details and validates claims. Payments can also be made online, by text message and using a phone keypad.

A new SMS solution now includes mobile payments and TechTracker, an online application allows users to check a technician’s location,

contact details, photo and appointment information, as well as cancel or rebook our service. As a result of this service, we have seen an explosive 429% increase in total self-serve interactions and Pay by Link is now used for over 70% of payments made after initial booking. These routes are then supported by social media, web chat and call centre functions.

While these specific examples of digital technologies are not ground breaking in themselves, the benefit is in how combined they have been utilised to remove friction, enhance communication and create a seamless customer experience. Furthermore, the data captured provides us with evidence and insights into how we can continue to innovate and has helped us to identify new advancements.

When operating in a distress purchase environment, the option for upselling additional services can be limited. For insurers, however, there are undoubtable benefits of digital innovations, using knowledge about customers, and available platforms to drive addedvalue services and policyholder retention.

For industry suppliers, having embraced such technologies can be vital in winning new business. We have found that insurers value the customer engagement we offer, supporting their own digitalisation objectives, adding self-service convenience and communication ease to claims.

James Macbeth,

Managing Director, Auto Windscreens.

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LEGM RK

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Paul Nicholls,

Chair, Motor Accident Solicitors Society (MASS) and Senior Partner at Nicholls Brimble Bhol Solicitors.

Turbulence ahead for the claims sector Whatever your political persuasion, the decisive result of the general election in December may mean a welcome period of relative political stability. For sure, political disputes and crises will inevitably lie ahead, but the sustained political turbulence may now be behind us as we enter a new decade.

For anyone working or needing to use the claims sector though, the turbulence and instability may only be about to start.

Despite the election period, the Motor Insurance Bureau insist that their work has progressed and is on course to deliver the new Portal ready for implementation in April. They remain confident that the tests conducted demonstrate that the new process is fit for purpose. Whether the Ministry of Justice is ready to press the go button remains to be seen.

It almost certainly shouldn’t unless it can be demonstrated that substantial progress has been made. Many central issues remain unresolved. The dilemma of handling mixed or multiple injuries remains. It is still not clear what happens when a claim is complicated by disputed liability or there are duplicate proceedings.

The details about how ADR will work for unrepresented claimants is unclear and we still have the unfair disparity of it not being offered to represented claimants. There are still no apparent plans for independent governance, oversight and stakeholder scrutiny of the new Portal, as with both

FOIL in 2020

2020 will be a very significant year for FOIL and the insurance industry FOIL will continue to represent its members and the insurance industry generally with key agenda items, including: • The reform and development of the new low value RTA portal being built and managed by the MIB. FOIL will continue to ensure that a fair outcome is sought for the Defendant community and that there is access to justice for the injured individuals.

• As London FOIL enters its second year, it will continue to build on its excellent platform and achievements, which have been well received by FOIL members and the London insurance market. London FOIL’s remit focuses primarily on Reinsurance, Marine, Aviation and Energy as well as climate change, technology, diversity and US/Latin American/Global risks underwritten in London.

• In 2019, FOIL Ireland launched with the aim of providing a unified voice for the insurance sector in the Republic of Ireland on some of the region’s biggest issues. FOIL’s expansions into specific markets demonstrate its aims to fully support the whole insurance market, not just UK based personal injury work.

• With very little clarification on Brexit over the past 3 years, it seems likely that 2020 will be the year in which Brexit is finally resolved! FOIL will focus its attention to resultant changes in law, regulation and legal procedure.

SOAPBOX

the existing Claims Portal Co and MedCo. Crucially it is not clear that the judiciary and the Civil Procedure Rule Committee have agreed the accompanying rules and pre-action protocol (PAP).

Meanwhile, the fundamental flaws remain.

For reforms originally about reducing fraud, the new process is tellingly light on anti-fraud measures. CMCs welcomed into the system for the first time. The serious mistake of not integrating rehabilitation, credit hire and repair costs, creating significant loopholes.

We still don’t know how the digitally excluded will be able to pursue claims outside the Portal, other than a basic helpline providing advice on using the new Portal.

To pursue April 2020 as a target date without resolving these issues would be reckless and highly damaging to claimants.

We remain steadfastly opposed to the reforms, but if they are to proceed, MoJ must ensure that vulnerable motor accident victims are protected from the outset. This will continue to be our driving force throughout 2020.

Anthony Baker

is a Partner at PLEXUS and President of Forum of Insurance Lawyers (FOIL).

• Lord Justice Jackson’s Supplemental Report on increasing the scope and value of Fixed Recoverable Costs. This extension could be implemented in 2020 following the 2019 Consultation. FOIL submitted a detailed response to this and any implementation of a Fixed Recoverable Costs regime will be a very significant change in the civil litigation landscape that FOIL will be closely monitoring.

• In Scotland, with some of the Civil Litigation (Expenses and Group Proceedings) Scotland Act 2018 now in force, 2020 should see the implementation of perhaps the most significant part – QOCS. • The industry will see reports from the Independent Inquiry into Child Sexual Abuse and the Grenfell Inquiry, with significant change potentially arising from recommendations. FOIL will be at the forefront of dealing with issues and the challenges for the market arising from these Inquiries.

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Andrew Gibbons ACII, Managing Director of Mason Owen Financial Services Ltd, Chair of Industry Claims Initiative on behalf of BIBA.

Why the terrorism gap remains On 12 February 2019, the Gov.UK website proudly announced: ‘Terrorism Insurance Gap Closed Giving Peace of Mind to Businesses’. The reason for this bold statement was that the Counter Terrorism and Border Security Act 2019 had achieved Royal Ascent, meaning that non-damage business interruption (NDBI) cover could be offered by the insurer signatories to the Pool Re treaty.

The news was welcomed by John Glen, the Economic Secretary to the Treasury and followed a concerted campaign by Neil Coyle, the MP for the Borough Market area of London to address an issue suffered by his business constituents. Many firms in the area lost thousands of pounds in revenue due to closure because they were inside the Police cordon.

Just like similar businesses that were within the Police investigation cordon following the Manchester Arena attack, none of these businesses’ premises had actually been damaged in the attacks. Conventional business interruption cover afforded to clients, even where Pool Re terrorism cover had been provided by the primary insurer, contained a gap that ordinarily would not indemnify those businesses.

Through my work with BIBA, I have followed this matter closely - there is a direct interest because of the business that I represent. The issue that I see is that frontline insurers have been slow to make this cover available in their policies.

Terrorism insurance written in the London Market does provide NDBI cover and has

Reforms 2020

Putting bereaved families on the parliamentary agenda is among much to look out for in the personal injury arena in this new, post-General-Election year.

Last summer, the Joint Committee on Human Rights called on the Government to consult on reform of the rigid law on bereavement damages in England and Wales. Only certain relatives from a restricted list are able to claim statutory bereavement damages, which are fixed at just £12,980. The call followed the committee’s scrutiny of plans for a remedial order to extend eligibility to include unmarried couples. It recommended that active consideration be given to adopting the Scottish system which is far fairer and would pull the law for bereaved families into the 21st century.

Northern Ireland’s discount rate remains at 2.5%, far higher than in the other UK jurisdictions. Catastrophically injured people in Northern Ireland have far greater deductions from their damages, purely because of their location. The recent developments in the new power-sharing arrangements offer hope for an appropriate reduction but APIL will continue to push for a review this year if no progress is forthcoming.

We will also monitor the impact of reforms north of the border. Qualified one-way cost shifting (QOCS) is expected to be

SOAPBOX

done for a considerable amount of time.

However, that cover excludes the chemical, biological, nuclear and radiological terrorism that would otherwise be afforded

by Pool Re. I’m writing this in the week that followed the most recent terrorist incident attack, on London Bridge on 30 November and it is apparent that the gap that the Government felt was closed, remains firmly open in the sense that the Pool Re NDBI terrorism cover is still not as widely available to retail customers as it should be.

We often criticise our politicians for the tardy way in which they seek to solve problems, but on this occasion they facilitated a solution for the insurance market, but the market is yet to take up the challenge of making this cover freely available to policyholders.

It is therefore my wish for 2020, that the market accelerates the availability of NDBI so that at least clients have the opportunity to protect themselves appropriately.

Gordon Dalyell,

President, Association of Personal Injury Lawyers (APIL).

introduced in Scotland by spring. It means injured people can claim compensation with the certainty that they will not be expected to meet the defenders’ expenses, even when claims are unsuccessful. This addresses imbalances between well-resourced defenders and claimants who are often inexperienced one-time users of the system.

We cannot look ahead to 2020 without mention of the reforms to whiplash claims in England and Wales, which are due to be implemented in April. APIL has called for a delay because of the General Election.

While work on developing the system was permitted under purdah rules, that work took place behind closed doors with the inevitable lack of transparency and collaboration. A pause is now needed so we can see which of our outstanding concerns still need to be addressed if the new system is to work for injured people. We will also continue to monitor the trend of rising vehicle repair costs and decreasing injury costs within the insurance industry, which cast an interesting light on the wider motivation for the reforms.

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Dr Matthew Connell, Director, Policy and Public Affairs, Chartered Insurance Institute (CII).

The UK in 2020

In 2019, the UK was an interesting place to watch – so much so that a colleague from Ireland told me that his daily TV schedule over the summer was Derry Girls followed by the UK Parliament Channel.

However, the UK’s status as a leading global financial centre lies in it being as tediously predictable as possible. There is no point being heavily pro-business one minute if that triggers an anti-business backlash the next.

The UK has gained a reputation for having a relatively stable regulatory and legal structure that, crucially, gives overseas firms the same treatment under the law as domestic firms.

After a couple of years of being exciting, the UK must set about rebuilding this reputation for being reassuringly grey. This will be a demanding challenge, because some of the shortcuts that had been available to the UK as a member on the European Union are no longer available.

It means that the UK will have to build trust with national regulators on a bilateral basis.

It will have to show that its prudential and conduct regulation does not simply tick all the boxes in terms of the kinds of rules that are in place, but that the whole ecosystem of the UK market and its regulation produce sound and predicable outcomes.

Tomorrow’s tech

As we enter a new decade, it seems a good time to look ahead to the world of transport technology in the 2020s. We are in an era of radical technological change – and vehicle technology is at the forefront of this change.

Last year, 63,000 ultra-low emission vehicles (ULEVs) were registered, an increase of 20% on 2017. Projections by the National Grid suggest that the UK stock of ULEVs could reach 10.6 million by 2030. Will this happen?

If so, where does this dramatic change in vehicle use leave insurers? The impact of electrification on repair costs can be attributed to a higher cost of parts, complex materials and construction techniques, and the lack of specialist mechanics to carry out specialist repairs. Some of these pressures are bound to resolve as market penetration increases but, as an industry, we need to increase public awareness about the reasons why these vehicles can be more expensive to insure as well as implications surrounding battery leasing, storing and charging that add further complexity.

Vehicle manufactures have been introducing Advanced Driver Assistance Systems (ADAS) at an increasing pace.

Thatcham expects that this year, 40% of cars on UK roads will have ADAS fitted. This technology could prevent an astonishing 3,900 deaths and avoid 47,000 serious accidents over the next decade. This is great news for road safety but it is also clear that we need to work more closely with manufacturers to ensure

SOAPBOX

This will be the defining challenge for the UK as a financial centre in 2020 – developing a system that may be different from other systems around the world, but which is easy to comprehend and that does what it says on the tin. It means that every aspect of regulation: people, processes and outcomes have to be coherent and easy to understand. It will also have to be backed up by engagement with other regulatory systems, not just at a governmental and supervisory level, but with practitioners, professional and industry bodies around the world as well.

If this is not the case, firms may come to the UK to trade in its domestic market, but they will not use it as a base for global operations, and overseas regulators will not give UK domestic firms the access they need to thrive on a global stage. That is what will be at stake for the UK in the 2020s.

Laurenz Gerger,

Policy Adviser, General Insurance, Association of British Insurers (ABI).

that these systems are built with repair, recalibration and replacement in mind and do not lead to unnecessarily high claims costs when minor accidents occur.

Developments in ADAS technology will ultimately lead to autonomous vehicles and the 2020s are the decade when we will likely see the first fully “self-driving” cars on UK roads. This is exciting. With the vast majority of road crashes caused by human error, insurers have been key supporters of the development of this technology. Autonomy is also set to deliver enormous economic and societal benefits. Of course, we must ensure that risks are understood and managed, and work with the wider automotive sector so that effective data sharing arrangements are in place to support the underwriting and claims handling process.

As technology continues to develop insurers, their business models and policies will need to adapt for the benefit of their customers. Despite these challenges, I am optimistic that our sector will continue to evolve and act as an enabler for new technology in the 2020s.

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Industry Innovators Interview:

Blocksure After observing other insurance systems being designed with little thought for the consumer, Ranvir Saggu, CEO, took the chance to make it right. Founded in 2016, Blocksure focuses on the customer while also providing ‘exceptional back office processing’ for the industry. Modern Insurance caught up with Ranvir to discuss the next steps for Blocksure.

Q A

How would you describe Blocksure?

Customer expectations have changed over the last 20 years and consumers now seek the best user experience - digital is taken as a given. At Blocksure, we always ask ourselves if the industry is delivering to their expectations. Can it do better? We want to be seen as an enabler that allows brokers, MGA’s and insurers to innovate and deliver for their policyholders through a digital customer-driven approach.

We have spoken to numerous brokers, MGAs and insurers who want to build new innovative products and they all tell us the same thing - either their current technology does not deliver or it is too expensive to build. We have created a platform focused on overcoming this and now brokers, MGAs and insurers can have access to technology to develop products just like many of the insurtech businesses that grab the limelight, alongside being much more efficient in their existing product lines.

Q A

Why Blocksure?

Blocksure understands insurance and its problems due to our extensive insurance industry experience, but that doesn’t mean we will solve all of the problems! We have created an insurance platform (Blocksure OS) using cutting edge

‘blockchain’ technology. We have focused on how our technology can solve some of the industry’s biggest problems and then worked with the sector to ensure it meets their needs. We are solving real problems.

I firmly believe that the customer needs to be put at the centre of everything the industry does. Technology should allow brokers, MGAs and insurers to focus on the value added activities that deliver for their customers whilst technology takes care of the hygiene issues.

Q A

What makes Blocksure different from other start-up companies?

Our insurance expertise.

Being an enabler - wanting to help existing players to deliver for their policyholder.

Our technology – using blockchain technology to solve so many key problems that exist across insurance processing: double keying, accounts reconciliation, bordereau management, etc.

Blocksure has focused on using our insurance expertise, understanding where the most immediate problems are in the insurance sector and as a result we have a clear direction of travel.

Blocksure works closely with customers and prospects to build and develop the product.

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Q A

What would you identify as the gap in the market that Blocksure aims to fill?

I have worked in senior finance and operations roles across a number of insurance businesses. In every role I have been amazed at how much of the back-office processing is manual, which often leads to costly errors and delays. Resolving these issues does not seem to be on the agenda of most insurtechs as their priority appears to be on building a ‘super’ front end to improve the customer experience or add-ons to supplement data. Few seem to focus on ‘what happens next’ in the process or ask the question: “how does it all fit together?”. This does not really benefit the policyholder as the cost of processing and delivery remains the same.

The back office - the plumbing which connects all the various parts of communication, document and data sharing - tends to be forgotten or ignored. Blocksure has taken a different approach in tackling exactly that... it has focused on the core connectivity which is the catalyst for the wider ecosystem to work more effectively:

1. Saving time and money

2. Improving the customer experience

3. Allowing the initiatives that look at using better data to be much more effective

A number of the labour intensive back office processes are either removed or automated; savings of up to 90% in back office processing can be achieved.

We have then supplemented this with a front-end product configurator that allows new products to be constructed in days.

Q A

What were the main challenges on standing out and establishing yourself in a competitive market?

The challenges we face centre around key legacy problems the industry has created and managed its way around for years. Blocksure has built its platform to serve the needs of the insurance industry today rather than tinker around the edges of legacy technology and making small fixes. I feel we are at the point where there needs to be a whole new generation of platforms focused on what the digital needs of policyholders and the industry.

The market is not necessarily looking for a ‘blockchain’ solution, and part of the challenge is getting the message out there about how using ‘Blocksure OS’ can transform a business’ operating model. We offer insurance businesses the opportunity to completely change the way they look at products, how they deliver their back office functionality, and improve their profit margins.

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Schemes, Delegated Authorities and MGA’s have created very messy ‘back office’ systems. This has been created over many years because brokers have differentiated products for their customers, but the insurer systems have not been able to keep up. As a result, bespoke systems (in some cases spreadsheets!) have been used which do not connect well with the organisations in the relationship.

It has been important for us to maintain focus on the main problem area, while also demonstrating the full capabilities of Blocksure OS and how it can become an insurer’s, broker’s or MGA’s core platform in the future. But we encourage them to work with it and becoming trusting before jumping in with an entire system overhaul.

Q A

How is the wider industry responding to challenges in your area of the market, and how are you tackling these?

The wider industry is creating ‘bolt-ons’ and ‘add ons’ which solve single problems and sometimes create other issues. Some of the insurers and brokers are partnering with various suppliers, but this is simply masking the bigger problem. It is creating marginal gains but is not solving the deeper issue of core connectivity which blockchain can solve. In addition, there are many other benefits including; greater compliance; audit controls; and speed, document and data sharing.

Blocksure OS provides an insurance supply chain with the capability to radically change how it performs. I firmly believe that insurance can help drive changes in the lives of people who are currently stuck in a poverty trap. I have embarked on the microinsurance project that allows low income communities to escape the poverty trap in developing economies. We have been tasked with adapting our platform for a micro-insurance project in Indonesia. The annual premium for a policy ranges from US$2 to US$10. The processing costs across the whole supply chain from policyholder to quota share reinsurer will be approximately US$0.50 per policy (dependant on volumes).

Q A

How are existing customer buying habits forcing change?

The world is being exposed to a range of different buying habits. You only have to look at how Amazon has become a day to day activity which people could no longer do without. Contactless cards - I remember thinking ‘do I trust this method with no PIN number?’. Whereas now I find myself wanting the limits raised because it is such a great payment method. These are examples of everyday processes/experiences and they leave us wanting more from other suppliers of goods and services, which includes insurance. Direct Line provided a slick experience and

F E AT U R E S

knocked the intermediary insurance sector sideways when it came on the scene. Blockchain technology finally has an answer which allows the intermediated sector to take a massive leap forward and position brokers at the forefront of distribution, even challenging aggregators and direct insurers due to the cost benefits. It allows them to provide the advice which they have always done, but now with Blocksure OS (blockchain) they have a greater processing capability. A win-win for the intermediated insurance sector.

Q A

Q A

What’s unique about the culture at Blocksure?

Blocksure has a mix of insurance expertise and blockchain technicians. It is a small team who work using Agile to keep on delivering improvements in the product but are also very regularly in contact with brokers, insurers and MGAs. As a new and small business, the team provide input into how the business is run, but with a digital theme running through the heart. The key is to not let digital take over the important element of ‘talking’ to each other and constantly bringing the real-world dynamics into the office culture. This is delivered by regularly sharing customer and prospects feedback into the team.

What advice would you give to anyone else looking to disrupt the industry?

Make sure you are solving a real problem and work closely with the customers you are looking to create the benefit for. Show them you really understand insurance as it is all about credibility. I spent a few years working for Fosun Insurance Group (a large Chinese investor) and saw 100s of pitch decks from insurtech businesses. Some had created technology solutions for problems that didn’t exist. Other had great presentations but could they execute? An insurtech business needs to convince a potential customer quickly that its solution works, you are listening to your customers and can deliver quickly.

Disruption is no good unless it creates benefits and you can explain what these benefits are.My role is to put in place a number of initiatives and protocols across our offices to ensure that our employees feel empowered to engage in a way that is relevant and localised to their office.

Ranvir Saggu

is the CEO of Blocksure.

Q A

Where do you see Blocksure this time next year?

Blocksure, this time next year, will have a small group of clients who we will work very closely with. This group will provide enough range and depth to continue to develop Blocksure OS at the same time as generating revenue for the business. Products will range from On Demand; Schemes; Property Owners in locations including Holland, South East Asia, Brazil, Japan, Germany and the UK; and involve insurers, reinsurers, MGAs, credit unions, brokers and wholesale brokers.

We will have built the core capabilities through 2020 which will position us for major growth in 2021. We will be able to launch products for brokers, MGAs and insurers in an Agile manner where they can learn very quickly what works and doesn’t work.

This will allow them to deploy and adapt products very quickly and economically for their benefits. Gone are the days when launching new products takes months and is costly.

The market is not necessarily looking for a ‘blockchain’ solution, and part of the challenge is getting the message out there about how using ‘Blocksure OS’ can transform a business’s operating model

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New decade sparks urgent need for motor insurance providers to get e-mobile ready Who can say whether it’s the influence and inspiration of David Attenborough and Greta Thunberg or - cynically - the government tax breaks offered on environmentally sustainable transport solutions, but it certainly seems that the tide is turning on conventionally fuelled vehicles. The motor insurance marketplace undoubtedly has a role to play in supporting the vision for a more environmentally sustainable mobility future. he Department for Transport’s Urban Strategy has identified walking, cycling and active travel as the number one option for short journeys but, thankfully for the motor industry, longer trips will inevitably need vehicles. These vehicles must spearhead the transition to zero emissions. As e-mobile solutions become the remit of the early majority and not just innovators, the insurance sector is in danger of getting left behind.

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So, how must the landscape of the motor insurance market change as people’s demand for eco-friendly mobility increases?

Right now, there is an expectation that premiums for electric vehicle insurance are higher than for conventional fuel vehicles.

These vehicles are more expensive after all and need more specialist replacement parts and repairs, but as technology evolves it is expected that the playing field will level out and motor insurers will fully embrace alternative fuelled technologies. Ensuring that their supply chain is effectively geared up for this change should be number one on every motor insurers ‘to do’ list.

The motor manufacturers are investing heavily in gearing up their networks to provide the right skills and support for electric vehicle maintenance and repair, but it’s essential that the wider, after-sales community is equally well equipped to handle them too. As such, motor insurers must ensure that their repair supply chain is not only

Motorists have made the change for a reason - be that ethical or financial - and insurers must appreciate that, or risk losing the respect and brand loyalty of their customer base

properly qualified, but sufficiently comprehensive to support the low emission vehicle take-up. Insurers must be liaising with their vehicle repair network to make sure they are fully qualified to work on different hybrid and electric vehicles. Whether those skills are situated locally or pooled in centres of excellence will be determined by skill availability, but one thing’s for certain – policyholders will not hesitate to change providers if work is not up to scratch.

So, now is the time for insurers to be asking key questions of their supply chain. For example, what are their plans in respect of hybrid and electric vehicle availability across the UK? What are the capabilities of the repair network to ensure that vehicles are dealt with as efficiently as possible? The ‘sole supplier’ model should also be examined carefully - after all, one supplier is unlikely to be able to fulfil all the mobility needs of the insurer’s customer base.

Another question faced by the motor insurance industry is what to do when a policyholder’s electric or hybrid vehicle is in an accident?

Will they be satisfied with a traditional fossil-fuelled vehicle as their courtesy car? The answer is likely to be no. Motorists have made the change for a reason - be that ethical or financial - and insurers must appreciate that, or risk losing the respect and brand loyalty of their customer base. Replacement car providers must take responsibility too. It’s up to us to provide accessible charging points at our rental locations so insurers can embrace new motoring technology and support their policyholders.

Electric and hybrid vehicles are shaking up the motor insurance sector and are likely to be the first of many future mobility changes.

The motor insurance sector needs to be awake to the ever-changing needs of the customer.

James Roberts

is the Business Development Director of Insurance at Europcar Mobility Group UK. MODERN

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How to survive and thrive How can digital marketing be better utilised for a business to succeed in 2020? Sam Borrett, Director of Legmark Ltd, discusses how.

here are constant threats to the legal sector: loss of jobs through AI and automation, loss of entire firms through PI reforms, pressures on fees and profitability, the list goes on. But it is possible to not only survive, but to thrive… by embracing digital marketing and making it more effective for your business.

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By implementing effective search optimisation, improving conversion rates and customer journeys, and through quality email marketing, I’ve been able to generate thousands of new clients every month for law firms. They are thriving in a difficult environment – here’s how you can too.

Stop Doing It Wrong!

First – and most important - you need to ask yourself a number of questions: Is your digital marketing working? How are you measuring the results and what KPIs have you set? Is the in-house marketing team spending their time on the most effective activity?

Are you outsourcing the right work and making sure your agencies are delivering optimally?

It’s easy to blow a load of cash on PPC, web development, SEO, and never see the returns if projects are not implemented and managed properly.

Step Away From the Blog I’ve lost count of the number of law firms that are churning out blog posts that have little to no benefit to their website It’s easy to analyse these with third party software (which we’ve done extensively), and you might be surprised to discover that the blog posts from even the largest law firms are not ranking for any keywords in search engines, and contribute nothing to the overall site performance.

Think about how much time and resource you’ve invested in getting partners and senior solicitors to write blog posts with no actual ROI to this work at all.

Instead of short blog posts – focus on in-depth thought leadership articles, or useful content such as guides. You should base the subject matter around your keyword research to determine what will bring you most benefit Keep it relevant to your key services to improve the topical relevancy of your site and make sure you are linking internally properly to further strengthen the signals to Google.

The Missing Link Links are important still – but not necessarily in the same way as before. A highly relevant link from a reputable website where people click through to your site and then spend time on your page, or complete an action (such as fill out a contact form, or download a document) will be worth much more than many lowquality links that don’t generate traffic.

Are you doing social media for the sake of it? What are you getting in return?

So if you’re paying a digital marketing agency to build links – stop.

Focus on creating linkable content and assets; such as a survey with data analysis, an interactive infographic, a downloadable white paper or report, or a detailed guide on a specific subject.

Then work the digital PR angle to promote your content.

Social-lite Are you doing social media for the sake of it? What are you getting in return? If you are a consumer-facing business then you might find that social media is best used for customer service, reviews, and creating some additional trust and authority signals for potential clients.

Firms selling services to other companies may find better value from publishing thought leadership content on social media and raising the profile of individuals in the company.

All firms can use social media for engaging with key influencers and journalists as part of their digital PR activity. Facebook (with it’s increasingly older demographic) can be a very cost-effective platform for advertising.

Size Doesn’t Matter Are you a local firm and worrying about cost of SEO and digital marketing? You don’t need to compete with the large national firms for difficult keyword searches and website traffic – just optimise locally and be smart with social media and digital PR. You should set up and fully optimise your Google My Business listing – including photos and videos if possible.

Encourage clients to review your business on your Google listing when you know they’ve been happy with your services.

Sam Borrett

is the Director of Legmark Ltd.

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How digitisation affects customer interaction and the continued importance of human interaction in the process

The continuous and fast-paced evolution of our digital lives forces us to constantly rethink the claims process as we know it. Major changes are on the horizon for the way in which we work; reducing cost and delivering faster and smarter responses. erhaps most prevalent is the rise of artificial intelligence (AI) which continues to disrupt known processes and redefine the claims path. AI combs through data and annotations and prescribes action, identifying when – and which – resources should be used for the best outcomes.

Many insurance companies are already using AI to handle lowlevel and small claims, speeding up the claims process and helping customers to self-serve and handle their claims at a time that suits them.

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AI and rule-based programs can expedite a claim or inform whether it should or shouldn’t be repudiated. They can assist with decisions, help direct resources appropriately, and enhance our ability to respond and react. But which actions are triggered, what happens next in the journey and the way this is communicated to the customer is the human element, and that is a crucial element of the process too.

Whilst the use of technology increases, there is also a greater focus on an in-depth understanding of customer behaviour. By applying lessons from behavioural economics and psychology, behavioural scientists and specialists in emotional experience are showing us where improvements can be made in the claims journey to improve customer satisfaction and make claims easier for everyone involved.

When identifying and working with customers who’ve undergone a stressful event, it’s imperative that they aren’t treated as ‘a process’. Their emotions and reactions throughout the claim need to be understood to ensure that a traumatic experience isn’t made worse.

For many, the fear is that as we continue to automate the claims journey, we will remove human interaction from the process. I see the reality as very different

The next evolution in digital development is therefore how to marry the two together – how can AI and machine-learning help us deliver customer care that is both personal and programmed?

Can future AI be developed to read emotional reactions, and deliver an appropriate response or will there always be a need for human empathy and problem-solving skills?

For many, the fear is that as we continue to automate the claims journey, we will remove human interaction from the process. I see the reality as very different.

The AI of the future would analyse incoming claims across multiple channels and direct them through the journey in a way that’s right and fitting for them. If the technology can detect an emotional reaction during the claim, for example frustration at the speed of progress, then AI would automatically trigger an increase in updates and communications. The key here though is being able to differentiate between emotions. For example, if the customer wasn’t just frustrated but also vulnerable and showing signs of distress, a specialist customer care manager would be alerted to intervene instead.

The benefit of increased automation is that as AI takes care of the routine tasks it will allow us to spend more time on the important human aspects of the claims process; empathy and complex problem-solving. It’s in these areas where human interaction is key. After all, our customers will still be human, and they will react in many ways to each different event.

It will be our job to ensure that the programmed elements of the claim are emotionally appropriate, and make sure that when we’re needed most, the tech we’ve built is instinctive enough to know that too.

Richard Sheridan

is the Director and Head of Innovation at Sedgwick.

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F E AT U R E S

Recruitment in insurance

with Steven Lawes, CEO of Lawes Group

Q

What are some of the unique challenges that employers face today in terms of finding good quality candidates? And how does the recruiting process intend to retain that level of talent?

A Diversity in insurance certainly has and will continue to improve throughout 2020

Q

With projects such as the ‘Dive In Festival’, and ‘Inclusion@Lloyds’ gaining momentum, how is the recruitment industry aiming to improve diversity in the Insurance Sector in 2020?

A

Insurance as a whole is proactively taking steps to improve diversity across the board. The awareness of the advantages of having a diverse team is taken seriously. I would suggest that every brokerage, insurance company, syndicate or any business affiliated with the insurance industry has some form of representation and the larger companies have embedded teams that champion diversity in the workplace. New research among the 10,000 attendees at “Dive In 2019” revealed that 93% of insurance professionals believe managers have got the message that diversity and inclusion is critical for business and are actively taking positive steps forward. We hosted a breakfast last year - partnered with the Lloyds Market Association - to discuss diversity and how we can all work together to ensure our industry is flying the flag.

The response to the breakfast was excellent; representatives from all across the industry were completely engaged. We have been asked to host another breakfast in 2020, which will be coupled with many events throughout the year, peaking with the Dive-In Festival. Diversity in insurance certainly has and will continue to improve throughout 2020.

Q

The rise of AI has changed the face of the Insurance industry.

From a recruitment perspective,

how has this changed the skill sets required of those entering and advancing within the sector?

A

Skills now required across the insurance industry have seen some more traditional roles adopt to incorporate technology, for instance: Actuaries coding in Python. This has allowed those who would have never considered technology an option, to explore, upskill and progress seamlessly into other areas of the business. We have now seen the insurance industry spearheading development with state of the art platforms - using DLT/Blockchain to simplify traditional insurance processes - which is opening doors into Software & Engineering and is attracting talent from a variety of backgrounds outside of Insurance. The progressive people are more likely to want to buy into the development of advanced technology - we have already seen this in Personal Lines and it is continuing to emerge and grow across commercial insurance.

Claims processes have become easier, more streamlined and faster due to the data available, meaning claims technicians at the smaller end do not need to be as technical. This has seen huge growth for the third party providers. Technology and use of AI has attracted a new generation to the industry, which may not have been within their thought process as a career option. It has also had a positive effect on the people who are firmly part of insurance, giving many of them the exciting chance to freshen up their careers, evolve and in some cases re-invent themselves. It is an exciting time to be part of this very changing market.

An ever present challenge for the insurance market looking to increase staff size and replace employees is catering to millennials. With a vast amount of companies - large and small - looking to add staff, millennials are expected to make up 50 percent of the workforce population.

Attracting talent means creating job stability, providing meaningful work and rewards for the type of work within Digital & Data. In addition, advanced technology and providing millennials a voice in how they perform their roles is vitally important. I will be essential for retaining top quality individuals.

Quality individuals are difficult to find for any business. These are the people that are usually excelling in their current role and are being well looked after by their current employers. They are not readily available.

Attracting the best available talent to your business still remains one of the biggest challenges to the insurance industry across the world. Obviously every circumstance is specific to the individual, but it can mean the people who are immediately available, or who approach the business directly, are not necessarily the best. That’s where the head hunting process comes in to its own; we are able to map the market, meaning you can have a full insight into everyone, including those who are not actively looking for a new role. We can then formally introduce the most talented individuals to your business.

Insurance is a competitive world.

The fact remains that even in this ever changing digital market, you really are as good a company as the people you have within it.

Steven Lawes

is the CEO of Lawes Group.

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Drone technology:

The changing face of the claims cycle I came to Kespry back in 2016. My background is in the geospatial world, where originally, I worked as a Geologist creating maps. For the last seven years, I have worked within Product design, helping companies from a marketing aspect to get the technology that improves their abilities to collect data in the field and put it on a map in a more streamlined fashion. us a little bit about your role at Kespry, and Q Tell how you got involved in the insurance industry?

A

Kespry has been around since 2013, and in the first rendition of the drone, a lot of the focus at the time was on getting the hardware up and running. We started off working in the aggregates and mining space, helping companies better manage their stockpile inventory information. From there, we began working on the technology to make the drone more accurate. Using machine learning and AI, we started developing our software technology further to work with the data better. It was at this point, we decided to move into the insurance and inspection industry. The reason we started working within that industry specifically, was because our software was developing at a level of sophistication that is needed for some of the things that you’re seeing today i.e. rooftop inspections using drones. This took off in 2017/18, meaning we could really start homing in on our clients’ needs. From running pilot programs, to developing software that is intelligent enough to be beneficial on a cost basis, Kespry’s influence has grown in the insurance industry.

Within hours, you’re sharing the entire data across your whole organisation, and can essentially work towards making a one-hour claims cycle based off that one drone flight 58

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Drone technology is undoubtedly streamlining Q the claims process. What positives and negatives has this created for insurance providers

/ claims specialists - what effect will this have on consumers both buying policies and making claims?

A

Based a lot of the feedback we have received, what insurance companies are ultimately looking for, is not just to streamline their process, but to also improve the claims cycle. This means having a lot more confidence in the entire process not only in processing the claims at a faster rate, but also ensuring far better accuracy when claims are made. Drone technology allows companies to increase the number of claims per day, replacing the labour and time-intensive aspects of the claims process (people on the roof and ladder assist crews), with a much safer and streamlined method. Drone technology also improves the actual accuracy of the claims through the use of more accurate dimensional analysis of the roofs. With the right technology, you can identify the damage and document it, meaning that there’s more information that goes along with a claim. What’s more, drone technology improves the way that a company’s in-field claims adjusters are interacting. This results in a faster, more accurate and streamlined process.

role does drone technology have in QWhat mitigating fraud?

A

It’s all about the technology itself. So, at Kespry, we have ‘storm damage’ technology that uses automation, AI learning and algorithms, to help us identify some of the damage on rooftops. This can be used for any sort of catastrophe response, as well as things such as hail strikes, roof accessory damage and missing shingle damage. All the technology that’s in the software itself, is helping to identify the damage automatically. It then tags it, and allows the adjusters to look and review that damage when making a claims inspection. The drone technology is also equipped with both high-resolution imagery and baseline imagery. With all that combined into a complete package, it allows insurance companies to have a very high level of confidence and ensure only truthful and actual claims are processed.

F E AT U R E S

…what insurance companies are ultimately looking for, is not just to streamline their process, but to also improve the claims cycle

The training itself is simple, and can be done in two sessions, held over the phone or online

In relation to sharing data, what are the realities Q of the speed this is relayed and the efficiencies this brings to the process? What further advances

can we expect in this regard over the coming years?

A

After a claim’s adjustment or an in-field adjuster on-site collects the data, you can actually review that data within minutes of the flight and you can start to process the claim itself, while you’re on site. Within hours, you’re sharing the entire data across your whole organisation, and can essentially work towards making a one-hour claims cycle based off that one drone flight. What’s more, it’s then processed automatically up into the cloud. In my opinion, the advances in the speed that claims are processed and the ability to access the information quickly, is always going to be the goal for us as a software company. That’s what we really try to focus on. Drone technology increases the speed, along with the level of accuracy, ensuring our customers are getting the most out of the technology available.

Can insurance/ claims specialists afford not Q to embrace drone technology if they want to retain a competitive edge?

A

It doesn’t really make sense for an organisation to not leverage technology like this. Across the board there’s a lot of benefits that drone technology makes available. Not only is it safer for those involved, but it is also quicker and more accurate.

For a homeowner making a claim, drone technology gives them more assurance that they’re getting the most accurate assessment possible. Ultimately, this is what all parties involved in the claims process seek, and competitively it makes sense.

From a recruitment perspective, how will Q insurance/ claims specialists need to approach hiring their drone operators or is a larger investment required from a training point of view?

A

Well, using Kespry as an example, we actually handle all the training ourselves. Drone technology is a huge recruitment tool for people that want to get into the business, but don’t want to climb on the roofs during the process. The current process used by companies arguably eliminates a lot of the good talent wishing to come into an organisation. The training itself is simple, and can

be done in two sessions, held over the phone or online. It’s a quick process, that is not a detour for anybody looking or concerned about what it takes to have a drone operator on staff. These are claimsadjusters that are trained, and do not have to be a specialised drone operator because the technology makes it so simple.

does drone technology impact the human Q How touch often required in the claims process?

A

The human touch aspect is kind of a myth. The technology is now good enough to ensure that the accuracy is there. For example, the hail strikes on a roof – if there’s enough strikes per face identified, then that claim will be paid. Recent reports done by Haag, an accuracy study, show how accurate our work with drones are. So, in my opinion, the need to feel the pad doesn’t necessarily come into play as much. Our customers have such a high level of confidence in drone technology that they don’t need to ‘feel the pad’.

there anything else you would like to add Q Isabout the technology?

A

I would like to reinforce the amount of time and energy that has gone into the technology that we continue to develop. We’re basically a software company that focuses on ensuring the level accuracy that’s needed. We didn’t get where we’re at today without having that formalised feedback from our customers – these are the top insurance companies in the world that we’re working with.

I believe that the level of confidence that the consumers are having around drones can be seen across the insurance industry. What’s more, the level of technology is there too, meaning it has now reached the point where it is becoming standardized.

I believe we’re seeing more adoption, and it’s becoming a more normalised way to process claims. Not only is this saving the field adjusters time, but also improving the overall customer experience. So, to conclude, drone technology is now at a point where I can confidently say it matches the industrial standards that are needed to process claims.

Jason Nichols

Director of Product Marketing at Kespry.

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F E AT U R E S

Car insurance that keeps getting better: Speaking to Modern Insurance Magazine, James Blackham, CEO, talked us through the concept behind By Miles, and how he sees the future of car insurance adapting to changes in the market.

A fairer kind of car insurance

By Miles offers drivers real time pay-as-you-go car insurance by the mile. We charge car owners a fixed annual fee to cover their car while it’s parked, then bill monthly based on the miles that they actually drive (like a mobile phone bill). It’s fairer for customers because they only pay for the insurance they’re using.

We send members a matchbox-sized device called a Miles Tracker that they plug into their cars themselves. It collects information about journeys in real time so that we can bill accurately.

In 2019, we launched our first trackerless policies too.

We now offer pay-by-mile policies for some connected car models without the need for any additional hardware or software - we just read the miles directly from the car’s mileometer.

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Q A

How did you come up with the By Miles concept?

Co-founder Callum Rimmer and I noticed the banking world being disrupted by challenger banks (Monzo, Revolut, etc.) and saw the opportunity for a similar movement in the insurance industry.

Banking’s long needed a shake-up, with the big players being held up by legacy systems and processes. New entrants have changed the way people think about their money, putting people firmly back in control. We thought we could apply this customer-centric thinking to car insurance in order to create a fairer kind of policy, starting with a product designed especially for lower mileage drivers.

The basic premise of our policies is simple: if you’re not driving, you’re far less likely to have an accident. We reward people for driving less by charging them less.

Unlike the opaque ‘black box’ insurance policies that drivers are used to, we don’t use driver scoring for pricing, we just use the distance driven. This means we can bring all the benefits of telematics - tracking down stolen cars, identifying car troubles or proving our driver wasn’t at fault in a claim - to more experienced drivers that don’t appreciate being told how they should be driving.

Q A

What’s the gap in the market that

By Miles is looking to fill?

Half of UK motorists drive under 150 miles a week, but traditional insurance doesn’t take that into account - low mileage drivers are subsidising the cost of cover for higher mileage drivers. We did some research with MoneySuperMarket that suggested traditional car insurance providers were charging lower mileage drivers more than higher mileage drivers (up to £233 more), which didn’t sound fair to us. Our pay-as-you-drive policy is designed for those lower mileage drivers who’ve been neglected for too long.

Another gap in the market we noticed was a lack of accessible policy documents.

They’re often filled with language that confuses people without an advanced understanding of insurance - adding to the sense of unfairness. We’ve created jargonfree policy documents that made us the first insurance company in 30 years to win a Plain English award.

Q A

What have been the challenges in standing out and establishing yourself in a competitive market?

Initially, we found that some of the more established insurers were reluctant to work with us because

We need to recognise that the insurance services and models that serve us today aren’t necessarily fit for the way we live our lives now, and they’re certainly not ready for tomorrow

F E AT U R E S

We had substantial interest when people found out what we were doing, resulting in a lot of press coverage and a long waiting list. Car insurance prices are at an all-time high, with the average fully comprehensive car insurance policy up by 5% year-on-year to £815 - so we expect to continue to see a continued level of interest from frustrated drivers.

current members, while keeping an eye on the future. As part of this, we recently launched the world’s first connected car policy, using data sent directly from a car’s manufacturer to work out the premium.

We made it available to Tesla drivers first.

In-keeping with our mission to offer fairer pricing, we recognised that Tesla owners were getting a particularly raw deal when it came to car insurance. A combination of the new technology and the high rating of Tesla vehicles (due to their acceleration) means a lot of insurance companies don’t understand how to cover them.

We’ve worked hard to remove any friction along the way. You can contact us on live chat instead of waiting on the phone; we launched an instant self-serve tool so you can make policy changes yourself in our app, and, even though we’ve been surprised how well people have gotten on

We’ve also just announced that By Miles is the first insurtech to get an open banking licence from the FCA. We’re always trying to find ways to make insurance more accessible, and with Open Banking, we’ll be able to make it available to more people.

For example, by allowing a customer that’s

with plugging in their Miles Trackers, with trackerless policies, we’re removing the need for that too!

been given a low credit score by a credit rating agency to demonstrate that they’ve met their monthly car insurance payments in the past.

of the fear of the unknown. Luckily, we’ve been able to partner with some forwardthinking insurers like AXA and La Parisienne Assurances.

Q A

What are your views on the loyalty penalty?

We feel strongly that the loyalty penalty is unfair and see the impact it has on vulnerable customers. We don’t think the industry has done enough to regulate itself and we hope the FCA will bring in proper reform. Right now, we offer a best price promise at renewal - our customers know that their renewal price will be lower than the price of a new policy. It’s simple, fair and effective.

Q A

How is car insurance adapting to changes in the market?

We need to recognise that the insurance services and models that serve us today aren’t necessarily fit for the way we live our lives now, and they’re certainly not ready for tomorrow.

We want to make sure we’re delivering a superior insurance experience for our

fully understanding the tech in new electric vehicles or even something as revolutionary as autonomous driving, you can’t just expect existing insurance products to flex to support these things overnight. You need to lay the foundations first, so we’ll be putting a lot of work in to ensure our technology stack, the range of products we offer, and our pricing model is ready for whatever comes next.

With technology evolving so quickly in the mobility space, we’re constantly developing new insurance models that can support the new ways people are getting around

This will mean drivers who could really benefit from the flexibility of our monthly pay-by-mile policy can now be offered one - including more vulnerable customers who might previously have had to take out a loan with a big APR to get their policy.

Q A

What does 2020 look like for By Miles?

We’re definitely planning to keep growing. Having launched in mid2018, we surpassed 10,000 live policies last year and have insured over 25 million miles, making us the largest pay-by-mile car insurance product ever in the UK. We’re also focusing on making the experience of managing your policy continually better.

With technology evolving so quickly in the mobility space, we’re constantly developing new insurance models that can support the new ways people are getting around.

Whether that’s new ways of car sharing,

James Blackham

is Co-founder and CEO of By Miles.

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F E AT U R E S

Five things insurance leaders can do to help organisations flourish through turbulence The insurance industry is on the cusp of change. Increasing and often more complex customer demands, societal and environmental disruption, the need to maximise new technologies, and the changing demands of a multi-generational workforce, are just a few of the factors driving that change. rawing on my years of experience in people development, I’ve identified five things insurance leaders can do to build strategies that are rooted in reality, ensure the necessary agility to manage unexpected change, and the resilience to overcome any setbacks.

D

Invest in self-awareness

If you do anything as a leader, make it this: invest in becoming highly self-aware. And ensure you invest in developing the selfawareness of the people in your organisation.

Your self-aware people are your organisation’s competitive edge, because self-aware people are self-assured people. They make better decisions – quicker. They understand their workstyle to become more productive. They conduct relationships in a way that’s mutually beneficial and respectful. They know how to influence peers and leaders, can develop higher-value customer relationships, and are a voice of positivity within teams. Developing self-aware people at every level of an organisation is a meaningful long-term investment.

And the figures back this up. A study by Green Peak Partners and Cornell’s School of Industrial and Labour Relations examined leaders to identify predictors of executive success. The findings stated, “self-aware leaders with strong interpersonal skills deliver better financial performance.”

Ask your community for help

Individuals don’t have all the answers – and they don’t have to. If you’re a transformational leader, you’ll have gathered around you, people who are better than you.

Diversity of strengths, skills, personal preferences, work styles, challenges and areas of expertise is what makes teams and organisations stronger together. Like a rope fashioned from hundreds of fragile threads, the strength of the collective grows by a magnitude until, woven together just right, it has the strength to bear the heaviest of loads.

Swiss psychologist Carl Jung spoke of personality preferences as a way to cut through the complexity of human behaviour. Once we understand the different preferences in play, we can use our self-awareness and others awareness, along with the diversity of thought and approach to successfully navigate any situation.

I firmly believe in the importance of developing Big Hairy Audacious Goals (BHAGs)

Be driven by purpose

One of the pitfalls of today’s climate, is that at any given moment you are presented with any number of directions you could pursue. That’s why you need a strong purpose, and not merely a plan. A PwC survey found that 79% of business leaders believe organisational purpose is central to business success, whilst millennials who have a strong connection to the purpose of their organisation are over five times more likely to stay.

A great example of this in action is the global consumer goods company Unilever, which has the purpose ‘to make sustainable living commonplace.’ Last year, Unilever announced that its purpose-led, Sustainable Living Brands, are growing 69% faster than the rest of the business and delivering 75% of company growth.

Create BHAGs

I firmly believe in the importance of developing Big Hairy Audacious Goals (BHAGs). Where your strong purpose keeps you focused and aligned, your BHAGs become your mechanism to stimulate progress and growth.

One of the insights of BHAGs, has been the 50 million people connected to us throughout the world. It’s not our purpose, but it’s one of the strong through-lines in our strategy that is helping us to get there.

The key with this type of goal setting, is that it inspires your organisation and your people to strive for something beyond just the day-to-day operations of your business.

Keep inching forwards

There is an innate human tendency to look for a comfortable, peaceful place and then protect that position. However modern-day insurance companies (who hope to keep customers) cannot afford to be risk averse. It is vital to keep inching forward when goals are in sight, even during turbulent times, taking your community with you.

Keep inching forwards in terms of practice too - providing flexible working and a forward-thinking culture, to attract multigenerational workforces with a whole range of different preferences.

Andy Lothian

is CEO of the Insights Group and co-founder of Insights Learning and Development, the global people development company, with a presence in over 90 countries.

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F E AT U R E S

JUST A THOUGHT from Eddie Longworth

A

s I write this article the Labour leadership election is underway, President Trump has opened a new front in his war with Iran, and the bush fires continue their devastating assault upon millions of hectares of land in Australia.

Even this brief scan of current headlines serves to remind us that the course of events can change rapidly with major consequences for the economic, social, and structural platforms on which we seek to predict the future. So as I look ahead to the coming 12 months, my key concepts for the claims environment in 2020 eschew the more usual focus on technology trends, customer ‘centricity’ (whatever that means), and the new digital claims journey – all of which are rapidly becoming ‘business as usual’ for the modern claims department – and look instead at three fundamental issues that I feel should shape the coming months.

Ultra-Speed A frustrated insurer client tells me of a recent low-level claims project which required an investment of £15k from within existing budgets. The proposal, review, and approval process took a total of 6 months and involved around 10 different people! In that time the claims department had managed thousands of claims with £millions of indemnity spend.

Alternatively, a recent supply chain project I am aware of managed to review supplier performance and reform the entire supplier base of c50 members in a period of less than 9 weeks.

I could make a good guess as to which business is more likely to thrive and prosper in 2020 and beyond. The modern claims department lives in an ultra-fast world that demands rapid reaction to changing events and opportunities. Essential longterm planning and strategic development must not be allowed to strangle the ultra-fast deployment of new solutions and calculated experimentation.

The year 2020 should be characterised by a surge in the effort from the claims department to seek and embrace constructive change

Ultra-Change The burgeoning world of InsurTech has often been described as a ‘threat’ to traditional insurance models and working methodologies.

This can lead to something of a siege mentality in which the ramparts of resistance to change and development are fortified to repel the invading hordes! It is a massive disappointment to read commentary which suggests that the InsurTech movement has somehow ‘failed’ in its mission to drive substantial change, and the more traditional approaches have ‘won’ this somewhat artificial war.

To paraphrase Gordon Gekko from the film Wall Street – ‘change is good’. Change drives better business, new opportunities, and greater freedoms from the drudgery of some aspects of claims management.

The year 2020 should be characterised by a surge in the effort from the claims department to seek and embrace constructive change.

Ultra-Adaptability Speed and change demands of the claims department an approach characterised by ultra-adaptability. This, in turn, requires greater breadth and depth of knowledge at all levels, a constantly evolving and shifting internal structure built around flexible and multitalented teams, and a leadership function that shifts their focus from the issues of today to the opportunities of tomorrow.

This type of environment does not happen by accident.

Ultra-adaptability is a result of serious investment in people, systems, structures, and a willingness to embrace new thinking, ideas and methods of working. Equally, we must raise expectations of what we expect from our employees. Too often we equate working hard with working intelligently, but nothing could be further from the truth. The claims department of 2020 must grasp the essential difference between the two and demand of its people and leaders a new commitment to insight rather than process.

Ultra-adaptability coupled with speed of action and a willingness to change drives great performance and in 2020 we should all be seeking to raise our game!

Eddie Longworth

is a Director at JEL Consulting.

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10

MINUTES

WITH...

10 mins with...

Karen Graves Q A

Has the industry changed drastically since you started working in it?

Yes. I think the variety of skills and talent that we need following enhanced regulation and the development of capital requirements and assessment has led to our market becoming much more professional, and that is a good thing. The industry has been opened to a whole range of talent and digital professions following these changes, things that we desperately need in this marketplace.

Q

Who inspires you and why?

A

What really inspires me are talented young people. What I mean by that is that I like to see different outlooks on how to do things. I want to be able to embrace the current trends and influences.

I love the eagerness and enthusiasm young people have in wanting to achieve, and as a marketplace I don’t want us to knock that drive out of them. We need to make sure that we have opportunities for those voices because they are what makes business so exciting right now.

Q A

If you had to choose one other company to work for who would it be and why?’

I thought long and hard about this. It is not so much a company, but more about what I want to do in an open and invigorating entity and market – prior to our interview I had written down what I get the most enjoyment out of and I wrote new start-ups, because they are creative and liberating. You can create a new entity on core values which reflects your social and working environment, and you can really build a powerful and positive culture. It is very freeing and liberating and I love that kind of space.

I love the eagerness and enthusiasm young people have in wanting to achieve, and as a marketplace I don’t want us to knock that drive out of them. We need to make sure that we have opportunities for those voices because they are what makes business so exciting right now

Q

What has been the key positive or negative impact of change in your area of the market?

A

Now we have opened those barriers to different kinds of people joining our market, it needs to continue. We must seek to engage and be more inclusive to ensure we get more talent in our market to continue to be progressive and be forward thinking.

While I think that regulatory changes have been a good thing in forcing us to open our business to different types of talent and skills, regulation is a burden on our business. It is very easy to become overcome by regulatory issues when you are trying to pursue a business strategy.

It is all about striking a balance when it comes to regulation.

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Q A

Have you had/got a mentor? If so, what was the most valuable piece of advice they gave you?

Yes, I have had a professional mentor, but I have also had a few mentors throughout my career.

The most valuable piece of advice I have received is, as a woman, learn to network effectively and make sure your key values and style is reflective of who you are in business and in your personal life.

Q A

If you were not in your current position, what would you be doing?

I would be a “starving” artist of landscape oil paintings.

Karen Graves

is the Chair of the Independent Women in Insurance Committee (IWiN).

The most valuable piece of advice I have received is, as a woman, learn to network effectively and make sure your key values and style is reflective of who you are in business and in your personal life

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