This month I am determined not to mention COVID-19. Now obviously I have blown the challenge in the first sentence. And the crisis we have been facing has understandably dominated debate in recent months. But I do think, as we settle in for a second six months of restricted movement and distanced relationships, that now is the time to focus on the other things our industry needs to achieve from which the pandemic has shifted attention.
First and foremost, of course, we need to continue to deliver for our clients. Since March, the market has shown remarkable resilience to carry on trading almost as usual. I mentioned last time that we have seen a significant rise in the volumes of business in London – up to 40% year on year in some lines of business. That has been London playing its vital role in the global market as the place that writes the risks others won’t. We can expect more of that and probably a further surge. After all the full impact of the pandemic on the global supply of capital is yet to fully work through. And we can look forward to other macro shocks that could further shift the equilibrium – not the least what happens in the United States on November 03. Innovative solutions to ensure that clients can maintain cover at an affordable price will be an essential requirement of the international broking community for the foreseeable future.
Where those clients are resident in the 27 nations that remain members of the European Union it will highlight another area where we need to deliver. Our members have done fantastic – often complex and always expensive – work to design and initiate appropriate solutions to continue to deliver services to these clients once the Brexit implementation period ends on December 31. Now we need to operationalise those solutions to ensure we can all – broker and customer – look beyond the end of the year with confidence. We have had little help to resolve Brexit from either regulation (given the lack of an equivalence framework in the Insurance Distribution Directive) or the negotiating teams (given the seemingly sole concentration on equivalence as the future for financial services). But with typical broker resourcefulness we have found a way to ensure that Brexit is not a barrier to trade for our EU business.
Elsewhere we need to renew our focus on finding better, cheaper ways to trade and redefine the cost of doing business in London. And that can further facilitate efficiency by supporting a new balance to the way we work. The innovation and creativity that will deliver the products that can support an ever-changing business world need personal interaction to thrive. We must, when it is safe, return to EC3 and mingle as we did before. But the five days in the City working week is a thing of the past. And that will mean we need less expensive central office space – indeed the SME businesses that make up the heartland of the LIIBA membership may conclude they need no City office space at all. In an industry where cost is driven by people and bricks and mortar, the latter may be about to become significantly cheaper – and we can pass that benefit on to our clients.
But we do need the environment that fosters innovation to return because we have a lot of innovating to do. The virus itself is driving an immense amount of work to try and find the right public/private partnership to provide better pandemic cover in the future. But there are other major themes that need our attention now. The UK will host the 26th UN Climate Change Conference of the Parties (COP26) at the SEC in Glasgow on November 01-12, 2021. It is vital that we ensure that insurance is at the heart of those discussions. The expertise the broking community provides to help clients develop more resilient approaches to their businesses; and then to design insurance products that reward that investment should be the cornerstone of how the world confronts climate change. We must get this message across to governments. That is work that LIIBA is already looking to take forward. Our members deserve a seat at the COP26 table. We need to deliver the lobbying approach that secures it.
I have to admit, I have conclusively failed at the task I set myself at the beginning. COVID-19 has permeated every paragraph of this piece in the same way it has permeated every aspect of our lives. But there are other things we must get done. Our industry excels in times of crisis because we see through the panic and concentrate on the practical tasks that can ensure progress. As autumn turns to winter, it is crucial that we deliver that focus once more.
