Predictions of how our lives will change as a result of the pandemic are wide and varied, reasonable and far-fetched. Everything, from the way we work and interact with each other to the way we shop and even how we are governed, is apparently up for grabs.
Much of this change, whatever it looks like, will eventually fall into the laps of insurers and brokers because whatever emerges from this crisis, we’ll need protection, our risks managed, and our misfortunes compensated.
“People have had to adapt, and we need to accept that things aren’t going to go back to the way they were previously,” says David Williams, MD of Underwriting and Technical Services at AXA Insurance.
“The industry needs to understand which changes are temporary, which ones are permanent and how widespread those changes will be. What do we need to do to enhance our products and draw new customers in?”
He says that while AXA and brokers have been quick to react to the immediate changes made by businesses, there’s something of an urgency to prepare for the future and a changed risk landscape.
“It’s about sound risk management and recognising that the profile of businesses will be different. We need to understand which business are going to be successful in the future and which aren’t,” he argues.
He believes that while we may see many traditional businesses fail, there’s a surge in the establishment of start-ups, and he’s keen to see AXA establish itself as an insurer of choice for these young businesses.
Whatever happens, the key to understanding the new risk landscape is to get in touch with clients, understand how their models or approaches have changed and bring risk management expertise into play.
“I think this is an opportunity for brokers to re-establish contact with clients to make sure the businesses that they have are the ones that they had and rebuild the trust that may have been eroded,” says AXA Insurance’s director of marketing and broker development, Alasdair Stewart.
Both David and Alasdair believe that most of this change will be digital and that data is going to be much more important to businesses of all shapes and sizes in the future.
“A lot of companies will now realise the value of customer data and wish that they’d held more of it. When the first lockdown came in, many small businesses were unable to contact their customers because they just didn’t have the necessary data,” says Alasdair.
And David believes that this and a broader shift to online trading means that more and more businesses will require risk insight and cover that they hadn’t considered before, such as cyber insurance.
“The reality is everybody gets targeted by some form of cyber-attack,” he says.
“Of course, these criminals target big firms but if they’re prepared to attack individuals, they will do it to small businesses too.”
And while he believes that more and more businesses will require cyber cover, he’s convinced that the cover provided needs to evolve and adapt: “It’s still not really clear what these policies cover. They’re less an insurance policy, more a provision of services.”
The reality is nobody really knows what the business risk landscape will look like in the future. The only way to start finding out is to get out there, speak to clients and understand how their operations (and their risk profile) have changed and feed that insight into their insurers to ensure we don’t see a repeat of the business interruption situation.
But while there will be changes, we shouldn’t expect fundamental or wholesale alterations across the business landscape.
“A year is a relatively short period of time. We’ve learnt a lot, but we shouldn’t over anticipate the scale of changes we’ll see,” says Alasdair.