Having moved eagerly on from 2020, and all the challenges that it presented, it is important still to reflect on what was learned and realise what must be brought forward. Though we may be understandably reticent to acknowledge it, the previous year did inspire growth, and provided an opportunity to reassess what is important to us, our businesses, and our clients, too.
The business interruption case provided the answer to any question regarding the priorities of the insurance profession during such an unpredictable time of upheaval: that trust is the most important resource. Since the start of 2020, small and medium-sized businesses have been the most impacted by the measures to counteract the pandemic and many have expressed disappointment with the way the insurance profession handled the related claims.
The Chartered Insurance Institute’s annual Public Trust Index surveyed 1,000 consumers and 1,000 small and medium-sized enterprises in May and September last year, and the results showed that satisfaction had dropped to 79% during the pandemic. While this may seem largely positive, it is important to note that during a time of high-claims, satisfaction usually increases. This is because insurers are generally very successful at awarding claims, a fact which was articulated by the ABI, who showed that in 2019, more than 98% of insurance claims were paid out. This being so, we would expect that satisfaction in insurance would increase in 2020, when the profession had ample opportunity to prove itself to be an effective safety net.
Through the Public Trust survey, we asked SME bosses if their business had been affected by COVID-19, and it was organisations that were significantly impacted by measures to slow the spread of the virus were the least happy about their insurers. This shows that it was business interruption which was the cause of this drop in overall satisfaction. In fact, three out of 10 businesses reported disappointment with their cover.
The FCA became involved with a matter of urgency and confirmed that insurers need to meet their commitments for cover in the case of COVID, and the judgement will have significant ramifications for insurance beyond business interruption and it is important this is also looked at as openly as possible. Following this, insurance professionals must be prepared to examine how this affects policies and be proactive in reaching out to policyholders about what this means for them. Insurers must apply the lessons of 2020 and make changes if they are to maintain trust and build a stronger basis for doing business with SMEs in the future.
Among many others, some of these lessons may include the need to speed up the handling of a claim, as policyholders have highlighted the importance of insurers not waiting for the legal position to be clarified before paying claims or reaching a settlement where the claim has some merit. Also, more than ever before, I think we have learned how important it is to establish an ongoing relationship with clients - for example, SMEs that have seen a change in circumstances, and who have perhaps made a claim will want to know if that claim would affect their future premiums. Being ready and able to reassure clients on these questions impacts how a client trusts their insurer.
The most important lesson from the last year is the value of care and compassion, as all of us went through the challenge of 2020 together. We must remember to approach the insurance business, which is often very personable in nature, in a very human way. Insurance will always be about people at its most fundamental level, and people is that thing which was most missed by all of us last year.
