When 2021 began, many expressed concern that rather than truly being a New Year, we would instead find ourselves living through 2020 2.0. But if there is one thing that the last 12 months proved, it is that 2021 was very much its own beast. Where 2020 was the year of learning lessons, 2021 was the year of testing and beta testing and benchmarking those same lessons in a bid to draw conclusions that might become meaningful and practical solutions.
It was the year that proved that when it comes to assessing how innovative the insurance industry is, or at least can be, the likes of Guidewire’s Paul Mang and Rightsure’s Jeffery Arnold have it right – insurance has long appreciated the need to pioneer new solutions. Rather than baulking at the continued upheaval of COVID, innovation in deal-making, strategic direction and technology has charged ahead and is already showing no signs of slowing down in 2022.
A recent report from the financial markets’ platform Dealogic revealed that global merger and acquisition (M&A) activity shattered all-time records in 2021, with the global value of M&A topping $5 trillion for the first time ever. A lot of headlines were made by the bombshell news back in July that the Aon-Willis Towers Watson mega-merger would not be going ahead but the market didn’t need a reshuffle of the world’s largest broker rankings to make this one of the most interesting years yet in terms of deal activity.
PIB Group’s acquisition in January 2021 established the tone for the rest of the year, which saw Aston Lark snapped up by Howden, Gallagher strike a deal for Willis Re and Ardonagh finalise its acquisition of the insurance operations of BGC Partners, Inc. Cultural fit and alignment of purpose seemed the key ingredients required to flavour each of these acquisitions, which in turn reflects the changing strategic focus and direction of firms.
2020 was the year that reminded insurance employers that people are the very lifeblood of a company. 2021 was the year that, if they had the mettle, allowed them to rise to the challenge and the opportunity this presents to change internal structures and processes to benefit staff and business alike. Many companies have adapted to flexible working and hybrid working models, they’ve developed new employee benefits and they’ve paid public tribute to the people that made coming out the other side of this crisis possible.
It’s easy to wrap up technology and innovation into one bracket and pretend they are one and the same but innovation can emerge from anywhere and, if it is to have longevity, it needs to come from everywhere. A new or renewed focus on the people within an organisation is already lending itself naturally to insurance businesses across the UK enhancing their customer-centricity. For, as Sean Kemple of Close Brothers highlighted, “if we don’t have happy colleagues, we won’t have happy [customers]”.
Insurance remains a financial services industry and the business case for doing the right thing will always be critical. Where insurance has excelled over the last year, is in actively setting out to make and prove that business case by doing the right thing first and letting the proof of the (Christmas) pudding be in the eating.
And though not synonymous, given our reliance and perhaps occasionally our overreliance on it over the last two years, it would be improper to discuss innovation without touching on technology. As emphasised by the level of response to IBUK’s recent report on 5-star insurance technology providers, it is clear that technology is very much front of mind for insurance professionals as 2022 unfurls. The insurtech market in the UK continues to thrive despite the turmoil of the wider business environment, attracting billions in investment and dominating investment portfolios.
The market is actively seeking new solutions and has learnt how to adapt internally to make the changes required. Perhaps the most marked change when it comes to technological evolutions in insurance is that many businesses appear to have become much more discerning regarding what constitutes essential and non-essential change. After an understandable rush to a digital-first focus in 2020, firms took 2021 at a more measured pace, examining exactly what they required and not slipping into the pitfall that is ‘tech for tech’s sake’.
It may have gone by in the blink of an eye, or at a lumbering tread depending on where you stand and what you’ve been up to, but 2021 has been a year of change for the insurance profession. The trick, and I am aware this is me preaching to the converted, is not to look for a repeat nor to expect a 2021 2.0 but rather to be braced and ready for whatever the New Year and the next 12 months have to offer.
For now, however, please accept my very best wishes to you and yours for 2022.
