BIBA’s new head of general insurance on state of market, terrorism and Brexit

Last month, the British Insurance Brokers’ Association (BIBA) appointed Alastair Blundell, formerly head of distribution at Tokio Marine Kiln, to the newly created position of head of general insurance. We caught up with him at BIBA’s annual conference to discuss his priorities and some of the other big issues in the marketplace. What will be the big areas of focus for you in the newly created head of general insurance role? What are the key issues facing your members? I will be responsible for managing general insurance policy work, liaising with government and the media. My priority will be to act as an intralocular between brokers and insurers to make sure our members concerns and issues are being raised. A big issue on the agenda is terrorism insurance. We published a report on the subject with Pool Re at our conference this year. One of the key findings is that only 3% of SMEs have terrorism insurance. So we need to raise the profile of the risk. In the upper market, the issue of non-damage business interruption covers is important. Brexit remains very important in terms of making sure that whatever deal is negotiated gives UK brokers the same flexibility they have today when it comes to passporting and servicing overseas customers. We are lobbying hard on that and for a very long transition period so we have time to work through what is put in place. Another issue is access to market for brokers. We see a lot of dislocation in the market around particular areas, such as professional indemnity and other difficult-to-place risks. So we will be working with the insurance market to understand those challenges and find solutions. Attracting young people to come into the industry is another priority, along with the diversity agenda. How is the broker role changing? What will the broker of the future look like and what skills will they need to help clients? There is the whole shift to intangible assets, and brokers need to help address these risks. We need to ensure there are insurance policies that can respond. Brokers need to scan the risk horizon and ask: what is the next big area? For example, I think we need to work out how to better develop products for reputational risk. We are operating in a rapidly changing world, particularly through technology. This demands a new skillset from brokers. But on other hand, some of the fundamentals remain unchanged, with a clear focus on customer need. That side of the role won’t change. How is BIBA helping brokers improve their offering to clients? BIBA has an Insurance Brokers’ Standards Committee. This is a relatively new committee that aims to continually raise the standards of the profession. On the back of that, we are developing a good practice guide for brokers. It will consider things like what good governance looks like and what role brokers should play in claims. We are constantly looking to raise professional standards. I think the profession is doing a good job today but there is always room for improvement. What is the state of the commercial insurance market? If the market hardens, are brokers ready? What can BIBA do to help? Currently, parts of the market are hardening in areas such as professional indemnity. The broker’s role is to explain to clients why that is happening. Our members have a key role to play and should come into their own in a harder market. They can scan the market and look for solutions at the best prices and with the best conditions. The broker’s role from a placement standpoint is now absolutely vital. BIBA is trying to point brokers to where risk appetite lies. Brokers need to be aware of the dynamics of the market and be close to it. A key skill for brokers is negotiating. Negotiation skills have perhaps not been as important in the soft market, so maybe some focus is needed to boost such skills. Training is a big part of our agenda. So, when we look towards the manifesto for 2020, maybe one of the items could be helping brokers operate better on behalf of clients in a hardening market. When times are tough, you do need the skills to navigate and it is something we shouldn’t ignore. Is there a concern that recent M&A activity, particularly the merger between Marsh and JLT, is reducing choice for insurance buyers? There may be some restrictions in certain areas, but in general there is still a lot of healthy competition. There are growing brokers just below the big three. So, I don’t think it will have a huge impact in terms of buyer choice.

BIBA’s new head of general insurance on state of market, terrorism and Brexit

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