There’s no other word in the London Market dictionary that strikes more fear, anguish and downright terror than…digitalisation. It’s a word that lurks in the corner of most board meetings like the bogey man and hides under many of the desks at Lloyds like the Loch Ness Monster. It’s been on the ‘to do’ list of all executives for decades but been well-executed by very few.
Until COVID-19.
As news of the pandemic spread throughout the world and national lockdowns forced companies to send their employees home (for what was thought would be a few weeks), the industry had a digitalisation wakeup call it couldn’t ignore. For an ecosystem that thrived on face to face selling, many had the shock of their lives when Teams and Zoom calls became the new norm. Against the odds, our antiquated industry hauled itself out of the dark ages and adapted. Luckily for us, here at OneAdvent, we had the tech already in place to make the smooth transition to working from home, but we soon realised we’d have to be even more agile than we’d ever prepared for. It’s not easy trying to negotiate deals or discuss technical risks via video conferencing, no matter how good the technology.
Lesson Number 1.
The industry is resilient and can operate with modern working practices (if it wants to) BUT patience, preparation and forward planning are key! Issues that could be resolved in a heartbeat face to face often take more time to work through remotely.
As companies battled to put their remote working strategies in place and deal with the fallout of a pandemic, another challenger for ‘biggest disruptor of 2020’ reared its ugly head. Brexit. With the financial services industry having to address market access issues and the ‘prudential carve-out’, businesses struggled to work through related operational challenges. The loss of passporting rights meant our MGAs categorically couldn’t carry out insurance distribution for EU risks, if we didn’t set up a licensed European intermediary. We worked together with our partner, Kasko, to get plans in place but, despite our early preparations, it still left two of our executives racing across London for COVID-19 tests before a last-minute flight to Hamburg to sign final paperwork. Thankfully, we are now fully set up and raring to go but there were many businesses in our position who couldn’t justify the investment in what was already a tough year.
Lesson Number 2.
It pays to do your research! Have a good understanding of what your business is trying to achieve and then carry out in-depth research of the options available enables you to make quick decisions and be proactive when faced with challenges. (Let’s just hope we write more EEA business than ever before to justify all the hard work we’ve put in!)
As the impact of COVID-19 raged on, desecrating our SME economy, the business interruption claims piled up. Policy wordings were tested, tightened and interpreted by the Supreme Court at the behest of the FCA. Yet the need for business interruption support was immediate. As the pandemic scenario was played out in court, policyholders and their SMEs were brought to their knees as their income dropped off a cliff.
Following the ruling, it looks like insurers will have to pay out on the majority of claims but what impact has the delay had? How many of these businesses are still trading? Were insurers right to appeal the high court decision? Clearly seeking clarity on such issues is sensible but these were big insurance companies with pay claims cultures, who had built their reputations on looking after the SME sector.
There are many decisions that have been made during this pandemic from governments to business leaders that I don’t believe we can really pass judgement on until the pandemic has fully played out – what will history say about the insurers support for SMEs during COVID-19?!
Lessson Number 3.
In the end, it comes down to getting your claims paid…
2020 was a tough year for people both on a personal and a business front. There were plenty of mistakes made and lessons learnt. Although its legacy will be in our hearts and minds forever, let’s hope we can build on its foundations.
About OneAdvent
Focused on getting innovative insurance businesses to market – and fast – OneAdvent provides a springboard for growth across the industry. Operating as an MGA platform, Lloyds broker and niche product distribution business, OneAdvent brings its sector expertise and technical know-how to bear for established industry players and entrepreneurial start-ups around the world.
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For all media enquiries please contact Sophie Farrow – [email protected].
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