Looking back to the start of 2020, it is clear that as early as the first quarter we saw the pandemic render economic projections and business forecasts obsolete, while industries across all sectors of the economy were forced to reinvent the way business is done, leading to dramatic shifts in the landscape of the risks we face.
The dynamics around non-life insurance have proved to be particularly demanding, keeping the industry in constant development mode as it evolves to meet new challenges, and increasingly unpredictable risks where uncertainties are prevalent.
Escalating pressure on the insurance industry
The recent past has seen escalating pressure on the insurance industry with the number of climate related disasters tripling in 30 years.
Major 2020 occurrences compounding changes in global weather included Super Typhoon Goni which hit the Philippines last November; the worst California and Australian wild fires this century and was also a record year for flooding and flood-caused destruction in the Asia-Pacific region.
There is no question that the insurance industry is reeling under this burden which has also seen non-climate related calamities such as the ammonium nitrate explosion in Beirut that killed hundreds of people and caused damage to property in excess of US$15 billion and the COVID-19 pandemic which presents a myriad of diverse and wide-spread challenges.
The industry is moving to address the growing hurdles with a view to ensuring its sustainability and the essential protection it gives clients.
The global COVID-19 pandemic – in essence another form of disaster with its disruption of lives and economies – has nevertheless brought positive aspects to business and our daily lives.
New ways of doing business
The lockdown has demanded new ways of doing business from enhancing technology-driven efficiencies, acting as a catalyst for operational transformation, developing new business models and connecting more closely with customers.
Standard Bank mentioned in a statement that the impact of COVID-19, like other industries, the banking sector may well have advanced five years in its digitisation journey in the space of just a few months.
“Non-Life insurance must move focus from analysing historical data in a paradigm shift to predictive, regionally calibrated, risk assessment methods. The calamitous events have demanded high levels of innovation in product lines to address clients’ needs at this time and looking at beyond the pandemic.”
– Khomotso Molabe, Chief Information Officer at Standard Bank
As we wait for the effectiveness of the vaccine and its impact on society, we continue to adapt to living with the virus and the changing circumstances.
Bringing it home – in looking at the crucial role of brokers we find those in our ambit have positively accepted the necessity of doing business differently, especially working remotely and increasing efficiencies through virtual meetings and the adoption of digital platforms.
In conclusion
From a personal observation as a CEO, I have learnt that the ethos of our company is not tied to the office and is not dependent in this age of technology on us all working from one venue but rather on us interacting daily.
We can still offer unparalleled service from wherever we are if we are prepared to put in the effort required and we have. We are successfully living our business continuity plan in a way we would never have envisaged a year ago.
We all now look at risk differently and as lifestyles change, the world will be a different place with new challenges for insurers and clients alike as new risks are contemplated. The astute, brave and bold will adapt and thrive.
Sharon Paterson | Chief Executive Officer | Infiniti Insurance | mail me |
