Unsurprisingly, January is the month during which we at LIIBA give some thought to the year ahead and where we may need to act to support our members’ interests. And we package all these ideas up in our 2020 Agenda that we published last week.
The nature of things is that, year on year, the business of an insurance industry trade association does not move that fast. Market modernisation programmes are inevitably multi-year events; tax and regulation always a challenge. But 2020 does have the feel of being a more dynamic year than for some time. And it needs to be.
While much of our work will still be dominated by Brexit – helping members make the right preparations and lobbying both sides of the negotiations to try and ensure the best outcome for brokers – we now know Brexit has been done. So, plans turn to what comes after. Regardless of your views on the UK leaving the EU, it will facilitate a more flexible approach to liberalising trade in services. We want to work with government to exploit that opportunity and open new markets – especially in parts of the world where London has not traditionally been strong. We will build on work we did last year around issues that hinder trade with Brazil and Colombia, while exploring some possibilities we have identified in Saudi Arabia. And we noted with interest Lloyd’s chairman Bruce Carnegie-Brown’s comments on protectionism in India recently and stand poised to add the voice of the intermediary to this argument. Lloyd’s and its distribution partners together could form a powerful voice.
Lloyd’s itself is another area where thoughts are firmly focussed on the future. I have rehearsed our thoughts on much of the marketing side of these proposals – specifically the two exchanges before in this column. But we do also have a strong interest in how the supply side develops, and we are keen to emphasise the extent to which all this work needs to recognise the fact that best value does not always equate to lowest cost.
Lloyd’s is the Harrods of insurance not the Lidl. You can buy a pint of milk in Harrods but why would you? Our sophisticated client base comes to London to buy a quality product and is prepared to pay more for better service. One of the things they particularly look for is a challenging, competitive subscription market with significant options to lead a policy and a thoughtful, questioning following market to act as a check and balance on the lead to keep them honest. So, while we admire the focus on efficiency behind the lead-follow proposals, we are concerned that they could erode this valuable offering. Any standards introduced for syndicates to be recognised as a possible leader in a class of business must ensure that they do not create too great a restriction on the number of options available to clients, that would not be a progressive development at all. It could threaten a key cornerstone of what attracts customers to Lloyd’s in the first place. We will be keeping a close eye and offering constructive counsel as these proposals proceed.
These are exciting and substantial developments in two of the main areas where our work focusses. And both not without their urgency. But I mentioned a need for rapid change in 2020 and nowhere is that more evident than in our approach to climate change. I don’t want to come over all ‘Greta’, but the fact that Australia has been on fire for about three months because it basically hasn’t rained there for years is the latest clear evidence that the world faces a palpable threat from our weather patterns.
I wrote here a couple of months back how insurance can touch every part of our response to this challenge. We can incentivise and reward resilience through innovative products. We can bring expertise on how to develop that resilience in the first place. We can ensure sustainability is given equal footing with other aspects of client need. And we can remain there to put lives back together in the wake of an extreme weather event.
This is the year in which we need to step up the pace of these developments. In large part, they will be driven by commercial reality and individual broking businesses striving to further the interests of their clients. We, as their trade association need to support the process, share best practice and be the link between the commercial and academic worlds that can bring intellectual insight and sharp marketing minds together to deliver clever but also practical, saleable solutions.
All that plus an Olympics; a Euro championship which England could win and a US presidential election that the Democrats won’t. Bring it on.
