There’s a fine connecting thread that runs through each of the milestone roles that make up Warren Dickson’s (pictured) striking three-decade-long insurance career. It’s a professional journey that has seen him lead several eminent UK broking businesses – including Chase Templeton, Carole Nash and Fish Insurance – before he stepped up as MD of Aston Lark’s UK retail business in October 2020.
Every step of his journey to date has hinged on Dickson having his finger on the pulse of the socio-economic and cultural shifts that precipitate change in the offering and delivery of the insurance proposition. Looking back at his career to date, however, he noted that this foresight is fundamental to the role of the insurance broker.
“As I always say to my team, at the heart of insurance is people and that’s the people involved all along the value chain,” he said. “And you’ve got to be able to pick up on the mood music of what’s going on in UK Plc because it’s changing all the time. When I look at the way distribution has changed even within my lifetime in insurance… the aggregators didn’t exist when I started, it was all covernotes not printing certificates over email, and the internet didn’t exist like it does today.
“So, you can can see that if you don’t adapt to what the distribution looks like, or where the market is going, if you stay siloed and don’t see the trends that are going on around you, then you’re going to be stale and you’re going to go backwards when you need to be one step ahead. It’s not about reinventing the wheel, it’s about observing what’s going on in the media and the economy, and recognising the impact [these factors] will have, particularly on our vulnerable customers.”
The role of brokers is to try and meet the changing demands and requirements of their customers, he said, but also to be there for those customers in their hour of need. That hour has arrived for many SME and micro-SME customers, given the inflationary environment and the cost-of-living crisis that is impacting the cost bases of businesses across every sector. And it has presented Dickson and his team with a pressing challenge – how to warn against the perils of underinsurance at a time when businesses are looking to cut costs.
“We’re all seeing numerous factors that are pushing the economy into a negative environment, which is worrying whether you’re in a business or an individual at home,” he said. “And it has become apparent to me that the industry has turned something of a blind eye to the underinsurance piece over the last few years. It has been a case of ‘oh, we’ll worry about that next year. If the client’s happy to renew, let’s not rock the boat.’
“But for me, and the rest of the [Aston Lark] leadership team, we felt now it’s about time to really take this seriously. We know that inflation is at 11% and rising. We know that with things like bricks, cement, wood and labour; the costs for replacing all these things were going up anyway, not withstanding inflation, because of COVID and its impact on the supply chain.”
In a bid to get a handle on the underinsurance challenge, several months ago the team made a significant commitment – to go out to its clients and urge them to get a survey done of their assets. Aston Lark Retail’s pledge was that if they were wrong about the need to do so, they would fully cover the cost of the survey. That’s how convinced the team are that underinsurance is rampant throughout the sector, he said, and how committed they are to championing the role insurance has to play in the event of a catastrophic incident.
“If you’re not fully insured in that event, what’s the point of insurance?” Dickson asked. “We’ve now conducted in excess of 1,000 surveys and of them have found that 84% are underinsured to the tune of nearly 50%. We’ve got assets that we’ve now valued to be £150 million of worth underinsured with our customers. That’s only of a sample size of 1,000 clients and we’ve got a hell of a lot of customers.”
The business is heavily leaning on the expertise and specialism of its team to provide thought leadership and education to insureds across every business line of the group. It’s a critical push, he said, because the reality is that right now whether it’s your property, or real estate, or business, that’s hit by a catastrophic event, the likelihood is that you are underinsured given the supply chain crunch.
Dickson highlighted a recent example wherein the broker surveyed the first in chain of 20 education businesses. The business surveyed was underinsured to the tune of half a million pounds. Shortly after the sums insured were readjusted, the business suffered a catastrophic fire that would have put them £200,000 out of pocket. Having that insight made all the difference to the business owner, he said, and drove home the necessity of having the other 19 establishments in its chain revalued as quickly as possible.
“If it wasn’t for our account execs asking those questions and pushing this issue, that poor client would have lost £200,000 on the event of that claim,” he said. “And it’s not an easy conversation for our account execs to be having. And we’ve really thought about whether it’s the right time to be having these conversations. Because every business is going through a cost-of-living crisis – they’ve all got electric bills, gas bills, payroll etc.
“We don’t want to be adding to the burden of additional costs when we know this will lead to higher premiums. But we also know we can’t afford to sleepwalk into this problem. We can’t turn a blind eye to this because we know these businesses aren’t insured properly and the stats are saying we’re correct. So, we’re not going to shy away from tough decisions. It’s not a nice conversation to have with clients but the whole purpose of insurance is that it makes you whole in the event of an incident.”
Aston Lark has the opportunity to lead from the front on this conversation, Dickson said, buoyed by the support of Peter Blanc both as group CEO and as president of the Chartered Insurance Institute (CII). And of course, it may be that customers will look elsewhere for quotes from brokers willing to take a different approach to the matter of underinsurance, he said, but he’s happy and confident in the stance he and his team have taken.
“We’ve got to do what is right for our customers, and we will stand by that,” he said. “Because for me that’s where we can add value as a broker. And that might mean having the really tough conversations, where the premiums will go up because we’re doing the right job for you. But that’s where good advice comes in. Because I think that the old days of renewing [business] just to keep the customer, just to keep the wheels on the wagon until next year – well, good brokers shouldn’t be doing that right now.”
