Building business better after the crisis

Broker Extra 2020: Every effort is being made to ensure the UK economy fires up again, but how will brokers be operating and can they find better ways to function? Aviva’s Phil Bayles, Ian Donaldson of Atlanta Group and Sara Fardon, of Willis Towers Watson Networks take stock.

The panel: Phil Bayles, chief distribution officer, Aviva, Ian Donaldson, CEO Atlanta Group and Sara Fardon, managing director, Willis Towers Watson Networks

The pandemic has affected us all and this session brought together representatives from across the piste, with Ian Donaldson of Atlanta, a mass market motor market expert, Sara Fardon from a network comprising largely commercial specialists and Aviva’s Phil Bayles, who is in a key broker facing role.

Repairing the damage
Jonathan Swift acted as moderator – he is also Insurance Post’s director of content – and he began by asking whether the sector had been damaged. Fardon said two core offerings – business interruption and travel – had created problems. Many BI claims have been unpaid and while there are fewer issues with travel, she said: “There is a lot of confusion and customers expected a response – rightly or wrongly, they have been left wanting.”

Aviva’s Bayles said going forward, BI needed to be a lesson, with customers also needing to understand what they were not covered for. He pointed out the government’s early response – to suggest that BI would pay out – was unhelpful and led to a “general sense of expectation from very stressed businesses, who were desperate for a lifeline.

“I hope that the FCA’s action will provide clarity. Some BI claims have been paid and if the case finds others should, the industry needs to do this quickly.”

Bayles agreed the insurance sector’s reputation had been damaged and believed it could be five to 10 years for this to be fully repaired.

Meanwhile, Donaldson said it was also important to see the good that had occurred, with, for example, cover quickly being set up for NHS and other key workers who needed access to a car and for cover being provided for home working equipment.

Deciding priorities
Swift asked for priorities in terms of returning to offices and whether this was needed. Donaldson said he was surprised at how effective home working had been, and his team was now working from “around 2,000 offices”, namely rooms at home. Although he questioned whether there was still a “home office honeymoon period”, he believed there would be a “blended” approach so home and office working would both be allowed.

Fardon said network members wanted to return, at least in part, to their offices because it remains important to have a high street presence. She said concern was around ensuring staff felt safe to return and having clear guidelines if they were visiting businesses.

A further priority was ensuring brokers spoke to their clients in this rapidly changing economic environment and picked up early where they may need guidance. “Many will have had losses and exposure to the balance sheet. I would advise brokers too that they should look at their own business continuity planning with a fresh pair of eyes and see what risks there are if there is more exposure at work – make sure you understand how your office should be set up and if staff are going to be in different bubbles, for example.”

Bayles said he too was surprised at how well home working had gone and that blended approaches – being at home and in an office – were highly likely. But, looking at the market, he said there were “some real challenges ahead”.

“Many clients will be financially stressed, certain segments are more difficult to insure because of the risk and the market is hardening.”

This in turn meant brokers were likely to be the bearers of bad news, having to tell clients under financial duress that they will  need to pay more, and potentially for more restrictive cover.

Wordings in the spotlight
Given BI has largely not responded, Swift asked if brokers needed to spend more time scrutinising policy wordings. Bayles replied affirmatively and said overall, the industry needed to be aware that commoditisation – including in SME – meant that cover was often bought with no advice. “I think commercial clients will more of this and on why one policy might be better than another.”

Swift questioned whether panellists believed broking staff had enough skill to advise on the most complex wordings. Fardon said this was a key point and that while the skills were often there, technical training was perhaps viewed as less important. “When I started in insurance, you did exams and professional qualifications –  now there is less in-depth knowledge. This experience has shown us that quality brokers need to have those skills and will have them already.”

Finding opportunities
Donaldson said there are opportunities to exploit, including employing staff on “lifestyle shifts” which meant flexibility, and being able to log off to fulfil childcare commitments and perhaps work later hours “We are also digitally training and this is going well, including in group sessions.”

The pandemic had also provided management with useful information on consumer buying patterns and their willingness to use technology and facilities such as web chat. “It’s made us think about how we use our kit and can make it better – we will be investing in the next six to 12 months in every digital touch point.”

Fardon agreed Covid-19 was an opportunity to assess digital capability and to engage with clients. “Brokers are looking at their email communication, engaging with clients to ensure they pay by BACS and putting client documents into portals.”

From an insurer perspective, Bayles said Aviva had set up an advisory panel “to tell us where the broker pain points were” and so see what support could be provided. He said this included loss prevention assistance, which brokers could pass onto clients. Further, he urged brokers to “engage early” with clients as this meant that the right cover could be set up.

No one needs reminding that the economy is poised to be ever more challenging. But, as Bayles said, there are opportunities for firms to make savings and he said he was planning to halve his travel and accommodation budget. “You don’t have to travel or stay to do things properly and we will be having more virtual meetings with our brokers.”

This was backed up by Donaldson, who said brokers may also be wondering if they need to have such large offices and there may be some downsizing and perhaps redeployment of workers if customers are self serving more.

Local heroes?
As brokers begin to return to the high street, Fardon, said this would bring benefits as there is a push towards localisation. “People want to support their local businesses and brokers need to build on that and there are further opportunities to work with other business groups, such as the Chambers of Commerce.”

Donaldson added although the pandemic had resulted in people buying outside of normal work hours, such as at three in the morning, he believed local involvement mattered. Atlanta has a large base in Stoke, which he said was a struggling area financially and so, was also doing more to support local charities.

Although the majority of insurance people will have been working remotely, Donaldson said now was the time to ensure there are open conversations about how the future is going to look and how work will be structured.

He said there were fears about whether offices were going to be safe and this was an area where reassurance and explanations needed provided. “Our staff are in it together and we need to make sure we have the answers for them.”

Broker Extra runs for the rest of today (10 July) but previous sessions are available and the networking platform will remain open. Register today. 

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