It’s been a game of two halves this week and that isn’t just because of the football, as nerve-wracking as England’s progress has been. After various cyber-attacks it looks like cover is getting more expensive, just as businesses migrate online. Then there is the tricky matter of the recent FCA fine for Lloyds Bank.
Bad words don’t just cost you big money on Twitter folks – you have to craft those policy wordings very carefully indeed.
CAUTION: WHAT ARE WORDS WORTH?
Sometimes about £90 million. That’s the fine the FCA has dished out to Lloyds Bank for using `unsubstantiated’ claims about renewals at a competitive price. The case goes back over ten years and Lloyds has already paid out lots of compo, but it acts a warning to any MGA or broker to think about ALL the words they are using, in every communication.
Now we are all selling insurance via apps, or clickable social media links and chatbots are intervening in claims, quotes and renewals, you need to think about compliance. Yep, boring as hell, but it could save you a packet.
START: CYBER COVER ON MAJOR INFRASTRUCTURE – IS IT DOABLE?
IE ran an interesting piece this week by Forrester, which noted that AXA France had withdrawn from the cyber market. That is interesting because apart from insuring coal power stations, we cannot think of any other modern risk that has a `decline to quote’ notice slapped on it by a major insurer.
Fact is, hackers want ransoms in crypto-currencies right now, but what if one country decides to attack another by cutting off their internet server capacity, or freezing automated tills in supermarkets, ATMs etc? Covering those types of risks are probably a big ask for insurers – maybe it’s time to get governments, insurers and large food, distribution and energy suppliers around one big table?
RUN: GREENER INSURANCE CAN WIN NEW CUSTOMERS
Being green is good. Nobody really argues with that and so it’s interesting to see salvage companies like Copart put recycled parts and ESG (Environmental, Social Governance) at the heart of their operations this week. Copart MD Jane Pocock has told IE mag several times that the old ways of storing and breaking up vehicles are coming to an end. The end-of-life process for written-off cars is something that insurers are going to have to account for under ESG rules in the future too.
This got us thinking; how many brokers and MGAs could develop new products that have a circular economy aspect? From refurbished domestic appliances after a flood claim, to an electric vehicle courtesy car, rather than a petrol/diesel equivalent model. The possibilities of being a force for good are many and varied – if you build it right, then customers will probably support your idea.
AND GROW: TRAVEL SECTOR IS READY FOR A RETHINK
This week Staysure announced it was acquiring ROCK Insurance. The travel sector has been hit hard by Covid and in the wake of climate change activism it’s possible that the travel insurance market will shrink long term. That means broker consolidation for sure, but it also means innovation for the players left in the game.
How about UK Staycation cover, or more bespoke travel policies linked to big events? People invest in travel for emotional reasons. So whether it’s a once-in-a-lifetime eco-trip to see a nature reserve in Africa, or a family holiday at Center Parcs, the threat of having the entire thing cancelled because of local lockdowns, a failed PCR test or because Latitude Festival got cancelled at the last minute, people want a product that gets some cashback when their dreams go pear-shaped.
And on that bombshell, we pack our rucksack and head to CoverFest, where insurance brands compete to win Best Tribute Act. Well, OK, it’s a slightly silly idea…but who knows, maybe that Elvis suit will come in handy after all?