It is difficult to predict what could happen in five years’ time as technology and the world are changing so rapidly, but speakers at the 2016 NIBA Convention took a good shot at it.
Allianz chief general manager of broker and agency division David Hosking said from an insurer perspective, he expected more consolidation in the market. While there will still be “special offerings” they would have to be “niche” as they won’t be able to compete with the scale of the larger players.
Digital disruption is “going to break down traditional barriers to entry”, he commented. Already some insurers are experiencing that but this is “going to evolve further”.
Further, digital is going to “shift the nature of risks from physical assets to intangibles,” Hosking pointed out. Then there is also the integration of physical and intangible assets such as driverless cars, and drones.
But Hosking emphasised, data “can’t replace good old fashioned customer service”. Allianz uses data in many different ways, for example improving partnerships, getting more information on risks, improving on risks and predict behaviour. However: “We use the data to support but it can’t replace the customer experience.”
Aon’s CEO Lambros Lambrou agreed that data was “going to continue to fundamentally change how we do business”, he told delegates. “Existing risks are going to continue to shrink … but there are plenty of new opportunities out there”, particularly, he noted, since “We only properly respond to several of those risk”.
He warned that broking and underwriting compared with other industries was at risk of significant disruption because of the number of touch points with customers. Lambrou said: “It is a very competitive world out there, and the insurance industry needs to play catchup.”
Finally, NIBA CEO Dallas Booth confidently said he knew what would happen in 2021 in terms of the regulatory environment. “Why? Because it exists today in the UK,” he explained.
First, fair treatment of the consumer is at the forefront; second, product and services are designed to meet specific needs and are targeted accordingly; third, consumers have to have clear information and are protected appropriately before, during and after; fourth, advice has to be suitable and takes account of the consumers’ circumstances (already done by brokers) and finally, products performs in the way that people have been led to expect they will perform.
The government has issued its response to the financial system inquiry, Booth noted. “They said they would consult but my reading of the mood in the parliament, particularly the new parliament, this stuff is going to pass Parliament. It might take a year or so but in five years’ time this stuff is going to be in place.