Between Donald Trump’s decisive election victory, ongoing wars in Ukraine and the Middle East, major M&A swoops, and the murder of UnitedHealthcare CEO Brian Thompson – 2024 has brought a lot for the insurance industry to unpack. But what has dominated insurance discussions, and how has the profession risen to the challenge of navigating a complex risk environment?
Offering his insight, Neil Campling (pictured left), executive chairman of Verlingue, highlighted how the unstable geopolitical and domestic economic situations have been headlining discussions across the market. “Inflation was still high at the start of the year, putting pressure on claims costs for carriers, and employment and operational costs for all,” he said. “That said, most businesses seem to be doing reasonably well in terms of growth and profitability. However, people are now just starting to wake up to considering the consequences of the recent increase to employers NI contributions.”
For Jacqui Kelly (pictured centre), head of sales and distribution for Zurich in the UK, market service and brokers’ struggles with insurer service levels have been front of mind in 2024.
“Those discussions have meant we have become laser focused on our service across all aspects of our business this year and I am proud of what we have achieved,” she said.
Adding an MGA’s perspective to the mix, Nigel Palmer, CEO at Acrisure UK MGA, noted brokers embracing the “increasingly tangible” benefits of using an MGA as opposed to the more traditional insurance capacity solutions. “I think this trend will only continue into 2025, especially for the smaller brokers in the market who can’t obtain the commissions rates and service levels that their larger competitors can,” he said.
Touching on some of the key areas where the insurance industry has been challenged in the last 12 months, Campling highlighted concerns around capacity for higher risk property. Although it’s better than it was in 2023, he said, it has continued to be an issue for some sectors.
Another challenge for the market in 2024, according to Palmer, is the increasing scrutiny placed on the service proposition from capacity providers in high-volume product lines. The ‘computer says no’ attitude is under the spotlight, he said, and they simply do not have the resource to cope with the ad hoc requests by virtue of their business models.
Framing the challenges facing the insurance industry in 2024 is the transformation being driven by digital advancements, data, regulatory changes, and customer expectations, according to James Nicholson (pictured right), chief claims officer for Zurich UK. “In addition, we’ve seen increasing frequency and severity of extreme global weather events, leading to high claim volumes and large losses in property and casualty.
“As referenced in the Bank of England’s ‘Dear CEO’ letter in January this year, claims inflation has continued to be a significant challenge for general insurers. As a result, costs have increased across the board, including cost of labour and materials. We know that this industry is built on high performing talent, and we have a very real challenge, not only this year but in future years, to ensure that we are attracting and retaining the right talent to ensure we can continue to drive business and our company forward.”
Mitigating these challenges are a range of opportunities for the market to differentiate itself, with Campling highlighting solutions for risks at the edge of the standard appetite. “For example,” he said, “it is a little ironic that whilst wishing to demonstrate good ESG credentials, the recycling sector seems to remain a ‘no go’ area for all mainline carriers.”
A huge opportunity Palmer has seen has been the “lure of exclusivity” for brokers. “Unless you are a large regional business with millions of premium to place with insurers,” he said, “you aren’t going to be able to gain access to the best of breed wordings which we are able to offer.”
It was hard to have a conversation without mentioning artificial intelligence (AI) in 2024, and Nicholson emphasised the opportunity presented for the industry to utilise this tool to improve internal processes and customers’ experiences. Internally, he said, Zurich UK been exploring how to combine the best of this technology and its people to deliver the best customer service.
“I believe there is still some way to go to understand how we can most efficiently use this technology,” he said. “In addition, the FCA has continued to embed the Consumer Duty within the industry with its multi-firm review published this year.
“This insight has given us further information and a greater opportunity to improve our understanding of good customer outcomes. I think we are all working hard to seize the opportunity but continue to be challenged on the ability to prove good outcomes in a meaningful way.”
