Insurance Post Podcast
BI insurance fit for post Covid-19 pandemic purpose
Speaking during the latest Insurance Post Podcast, Grant said this autumn we will see the Stonegate and various eateries appeals looking at aggregation, the increased cost of working and furlough.
Grant said: “I think furlough is the really big one here. It is the one with big financial implications, but, equally, it is a Marsh resilience wording. Will that translate across to policyholders on other wordings? We will have to see.”
On the impact that these ongoing cases have had on the industry’s reputation, Matthew Connell, director of policy and public affairs at the Chartered Insurance Institute, said customer satisfaction for business interruption since the Covid-19 lockdowns have been a few percentage points lower than for other types of insurance.
However, Connell said the Financial Conduct Authority’s test case had drawn something of a line under things in terms of consumer perceptions.
The FCA argued for policyholders that the 'disease' and 'prevention of access' clauses in the representative sample of 21 policy types provide cover in the circumstances of the Covid-19 pandemic, and that the trigger for cover caused policyholders’ losses.
In January 2021, the Supreme Court ruled that cover may be available for partial, as well as full, closure, and for mandatory closure orders that were not legally binding.
The judgment brought to an end legal arguments under 14 types of policy issued by six insurers, and a substantial number of similar policies in the wider market that the FCA claimed would lead to claims being successful.
Connell said: “What is pre-occupying SMEs now is speed of claims and delivering on claims. That goes back to issues that payments aren’t being made because litigation is going on for so long.”
The duo also discuss whether a rebrand is required, how insurers have changed this type of cover, and the ways brokers have adapted the nature of conversations they have with policyholders to make sure BI insurance is fit for purpose.
As well as being able to listen to the podcast by clicking on the player above, you can also download and keep this episode of the Insurance Post Podcast to listen to anytime, anywhere you want to.
To download the episode, go to your podcast provider of choice (Apple, Google, Samsung, Spotify, Audible, etc.) and search for Insurance Post.
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24:01Insurance is now having to compete with a whole new breed of companies like Deliveroo for fresh talent, according to Grant Clemence, chair of the QBE Foundation.Valentine’s Day and high-net-worth insurance
21:29As luxury goods prices are up 32% since 2019, the greatest Valentine’s gift brokers could give high-net-worth clients this year is to review their insurance needs.What to expect from the FCA in 2024
17:46Insurers should brace themselves for the FCA kicking the tires of how well providers and brokers are adhering to Consumer Duty requirements in 2024.1. Headlines that shook insurance in 2023
18:33The news and views that shaped insurance in 2023, plus what can you expect from Insurance Post in 2024, are all revealed in our final video podcast of the year.9. How climate change is transforming insurance
18:36In the latest Insurance Post Podcast, Vesanto said 6% of properties in Great Britain are at risk of subsidence, but that is going to increase to about 20% by 2080.Moving forward, he said it was vital that insurers understand the risk of a property, rather than at a postcode, level to grasp how to respond to the greater risk of subsidence caused by climate change.Vesanto said: “Last year, we had over £200m of subsidence losses off the back of the hottest year on record in the UK. We don’t have to look far to see what might be in the future. If you walk across the pond, in France, that same kind of heatwave caused over £2.5bn of subsidence losses.“Understanding these risks is something insurers can do with precision underwriting. They need to start preparing for this today.”Resilient property stockFellow podcast guest Laura Evans, chief actuary of Flood Re, said her organisation is working with policymakers on considerations for planning and permissions to ensure the property stock in the UK is resilient to climate change in the future.As the 2023 United Nations Climate Change Conference – more commonly referred to as COP28 – kicks off in Expo City, Dubai, on 30 November, Glyn Brookes-Humphrey, director of regional operations at Woodgate & Clark, agreed that insurers are finally collaborating to make properties more resilient to flooding and subsidence to keep claims costs as low as possible.Affordable adequate coverThe trio also examine how the industry is working together to make sure adequate cover is affordably available for the increased risk to property and livelihoods.As well as being able to listen to the podcast by clicking on the player above, you can also download and keep this episode of the Insurance Post Podcast to listen to anytime, anywhere you want to.To download the episode, go to your podcast provider of choice (Apple, Google, Samsung, Spotify, Audible, etc) and search for Insurance Post.8. How inflation and the Consumer Duty transformed insurance in 2023
37:00Reflecting on the regulatory action and economic climate that shaped the sector in 2023, Sarah Ouarbya, financial services consulting partner at Mazars, said the Consumer Duty had forced insurers to review their product book, do a bit of spring cleaning and axe some policies.Ouarbya added that the Consumer Duty, plus the cost-of-living crisis, had also resulted in innovation when it comes to simpler, digital, online products.When asked by Insurance Post Podcast host Scott McGee had the Consumer Duty created better value for customers, she responded: “It provides different value. People get less, but hopefully the essential coverage they need.”Ongoing impact of inflationWhen it comes to the ongoing impact of inflation, Martyn Matthews, vice president for personal and commercial lines for the UK & Ireland at LexisNexis Risk Solutions, said higher premiums for customers was a trend that is likely to continue.Matthews said: “Even though inflation might start to drop, there is still going to be a period of time before insurers can react to that and bring prices back down.”Rory Yates, senior vice president of corporate strategy at technology platform EIS, agreed that inflation is a long-term problem for the industry that the regulator was likely to kick the tires of: “Claims inflation has outperformed inflation. There are wider supply chain issues that aren’t going away. Insurers are going to have to address this long term.”Looking ahead to 2024Looking ahead to what is likely to shape the insurance industry in 2024, regulation and compliance consultant Branko Bjelobaba said reduced supply of affordable insurance for certain sections of society will become a growing issue that the government may need to address.As well as being able to listen to the podcast by clicking on the player above, you can also download and keep this episode of the Insurance Post Podcast to listen to anytime, anywhere you want to.To download the episode, go to your podcast provider of choice (Apple, Google, Samsung, Spotify, Audible, etc) and search for Insurance Post.7. Should insurers fear or embrace AI?
25:32In the latest Insurance Post Podcast, Patel said AI was already being used by insurers for risk assessment, data analysis, automatic population of firms, predictive modelling, product design and some personalisation of cover.She said: “At Aurora, we are one of the first lead algorithmic underwriters in the SME space. "Where we are different from others is we algorithmically underwrite the medium space, mid-sized businesses that have traditionally been underwritten.Algorithmic underwriting and humans“Although we don’t have underwriters in the process, we do have risk assessments and portfolio managers continually monitoring the portfolio, tweaking the algorithms, and you do need that human in the loop."You won’t ever have a situation where you have got an insurer solely run by a machine with no human in the loop.Rory Yates, senior vice president of corporate strategy at technology platform EIS, said having a human keeping an eye on things is essential.Chris Kitchener, vice president of product management at Applied Systems, said he could not discount the existence of an AI insurer without a human in the loop at some point – but at the moment the technology is continuing to evolve.Vendor perspectiveFrom a vendor perspective, Kitchener said the evolution of AI is accelerating with hackathons and applications that are being created for the insurance industry.He explained: “It is so easy for us to get enamoured by the word AI. It is only valuable as part of a connected intelligence system. The value is as a co-pilot to what we do every day. It is about augmented intelligence.”The trio also examine the limitations of the current AI technology, plus the risks and rewards associated with embedding this technology in the insurance value chain in the future.As well as being able to listen to the podcast by clicking on the player above, you can also download and keep this episode of the Insurance Post Podcast to listen to anytime, anywhere you want to.To download the episode, go to your podcast provider of choice (Apple, Google, Samsung, Spotify, Audible, etc) and search for Insurance Post.6. Could embedded insurance result in mis-selling?
16:23In the latest Insurance Post Podcast, Sicsic, managing partner of Sicsic Advisory, said embedded insurance has been around for a long time with travel and white good, but technology has widened the range of types of cover that can be sold in this way.However, he flagged that, with this type of cover, checks need to be made so consumers understand what they have purchased.Sicsic said: “Do people really understand that they are purchasing an insurance product, and does it meet their needs?Double cover“The classic issue we have seen over the years is having double cover. You are purchasing a new policy, but have it already covered in your main policy. I would call it mis-purchase. You mis-buy by not exactly understanding the cover you are getting, and then get a bad surprise at the point of claim.”Sicsic is joined on the podcast by Matthew Connell, director of policy and public affairs at the Chartered Insurance Institute, who outlines the pros and cons of embedded insurance, and the steps to take to make sure seamless selling doesn't result in consumers sleepwalking into the wrong cover.As well as being able to listen to the podcast by clicking on the player above, you can also download and keep this episode of the Insurance Post Podcast to listen to anytime, anywhere you want to.To download the episode, go to your podcast provider of choice (Apple, Google, Samsung, Spotify, Audible, etc) and search for Insurance Post.