Luke Holloway examines key takeaways from the BIBA Conference 2021
The first virtual British Insurance Brokers’ Association (BIBA) Conference took place in May, with keynote speeches, seminars and fringe sessions covering a range of topics that are having an impact on the insurance and broking profession.
Here are some of the key points discussed at this year’s conference.
1. Regulatory challenge
“There is a conundrum at the heart of financial services, of maintaining a reputation for strong, sensible regulation while being flexible enough to adapt to changes in the market,” said John Glen MP when pressed in the opening address by Graeme Trudgill, BIBA executive director, as to why broking is so severely regulated.
“We absolutely believe in appropriate regulation,” said Mr Trudgill. “Our brokers are low risk but heavily regulated by the FCA. We do not expect a gratuitous reduction in regulation, but we would like something simpler and more cost effective to enable better productivity.”
Mr Glen, economic secretary to HM Treasury and City minister with responsibility for insurance, responded: “Our aim with financial services regulation is to make it better tailored to the needs of the UK economy and to facilitate greater growth and innovation.
“The Future Regulatory Framework Review will look at how that dynamic between regulation setting and evolution works, how it will be accountable to parliament and the relationship between the Treasury and regulators.” Mr Glen said he had never seen so many calls for evidence as he had in the past six months and stressed that there is a huge amount of work going on to improve regulation in the insurance sector.
“Solvency II is another area which provides a great opportunity to tailor the regime for the UK’s particular interest,” he said. “Previously it was not designed with only us in mind. This is the overarching approach we are taking and I believe if we can get that dynamic right, we can be responsive to the regulatory changes which brokers wish to see.”
2.Presenteeism is in the past
CII president Julie Page was part of a panel focused on the future of broking, which discussed how brokers can remain resilient after what has been an unprecedented 12 months during the pandemic.
“We have learned that productivity and presenteeism are not the same thing,” said Ms Page. “Our teams have performed brilliantly in a remote world, gained life experience and life benefit from it and enjoyed some of the aspects of these new working patterns.
“The challenge for us now is whether we can genuinely do agile hybrid working to keep the gains but add back in any missing value parts of interaction and collaboration through in-person activity.
“The old-school thinking of ‘you’re not productive if you’re not present’ has well and truly disappeared. The appetite for the benefits of flexible working to be retained is very high and our need for talent as a profession is also very high, so it is a challenge we are going to have to rise to.”
The CEO of Aon UK began the session by saying that the insurance profession was very quick to “give ourselves a kicking” over anything negative, but should be proud of the excellent job it had done in many aspects during a difficult 12 months.
“One thing we have done unequivocally is demonstrated our own resilience to this challenge of the pandemic, delivering almost unbroken service to our clients on a tremendous scale,” Ms Page said.
“Almost every organisation I have spoken to, however big or small, was able to literally move their workforce out overnight. We have built resilience into our systems and security into the ways we work, at a phenomenal rate. We have had some criticism, and yes we must respond to that, but at the same time we should be immensely proud of our profession.”
3. PI must evolve
“We really need to look at the way that professional indemnity (PI) insurance does not currently fit the needs of clients,” said Peter Blanc, group CEO of Aston Lark and deputy CII president, while chairing the ‘PI in a hard market’ session on day two.
“One area specifically is claims, which has always been an incredibly challenging aspect of PI. For most classes of business, claims notifications are simple and straightforward. In PI in recent years, you end up with this almost confrontational arrangement between client, broker and insurer, which is really not helpful,” said Mr Blanc.
Jane Kielty, managing director of UK retail at Aon, agreed: “I have always been taught that claims in insurance is always about unfortuitous events. The claims nature of PI policies flies in the face of that, particularly from some of what I have seen in the last year.
“It does not feel right that insurers are withdrawing from cover and from facilities. It is too late now for brokers to advise on business interruption coverage to clients, because they did that last year and the year before, and as soon as some insurers become aware of an issue they withdraw. It is really disappointing.”
Mr Blanc then highlighted moving to longer-term policies as a potential solution for creating a more sustainable market. “If an underwriter wants to write this class of business they have to commit to it to more than one year, so we do not have this yo-yoing of prices.
He continued: “From a broker’s perspective, the yo-yoing of PI prices is awful. When you sit in front of a client, yes it is lovely turning up as Father Christmas when rates are halving, but it is pretty horrible when you turn up as the devil incarnate when rates are doubling.”
Nic Brown, UK sales and marketing director at Markel UK, added: “There is a groundswell of support to end the boom-and-bust cycle of pricing for PI. We need long-term, sustainable solutions at the right price, with the right benefits and the right claims approach to gain back the trust of the customer.”
Mr Blanc concluded: “It is incumbent on all of us to be professional in the way we approach PI, so we get better outcomes. CII exams that make sure underwriting and broking staff are professionally qualified, on such a complicated class of business, are incredibly important.”
4. Remote support
‘Mental health in a post-pandemic landscape’ provided an impactful session, with CEO of Mental Health in Business and ex-broker, Claire Russell, in conversation with host, BBC News presenter Huw Edwards.
Ms Russell reflected on the huge shift in working patterns for insurance professionals in the past year and the potentially damaging lack of human interaction.
“For anybody who was already predisposed to any form of anxiety, depression or low mood, those feelings have been exacerbated. Several significant studies have revealed that the number of people experiencing these feelings has increased by 50% in the UK.”
She said that, although positive steps had been taken and awareness on mental wellbeing was improving, stigma was still at an acute and unacceptable level, while highlighting that 300,000 people a year in the UK lose their jobs due to mental ill health.
Ms Russell also spoke about the variety of companies’ approaches and processes towards mental health that her team had observed, both good and bad.
“The businesses that have done well in the past 12 months in terms of how they have supported their teams are those that have focused on what each individual needs,” she said.
“Everyone has unique challenges and different domestic arrangements, as well as responding differently to change and pressure. Have a conversation one to one, take the time to speak to an individual about their personal experience and find out what support they need to thrive.”
Luke Holloway is editor of The Journal