Before any journey of any real length, it’s always necessary to devote at least a few moments’ thought to some priorities.
Where are we heading and why? How do we plan to get there and how quickly do we intend to arrive?
Along the way, it might even be useful to stop and check that we’re on the right track. That can be particularly important to reassure those who are going with us, who we might have left behind or for those individuals who we plan to meet at our destination.
Setting out or revising an intended direction of travel is just as important for business and householders too.
Our objectives might shift and we might then have to adapt our plans to take account of radically different circumstances.
Every year, the British Insurance Brokers’ Association (or BIBA, for short) publishes a manifesto.
As someone who had the pleasure to serve as the chair of BIBA’s committee for the Greater Manchester region over the last 12 months, I know how important the document is both for my insurance industry colleagues and the clients on whose behalf we work.
More than mapping out the road ahead and its many challenges, it serves as a reminder of why we’re following a particular direction.
This year’s manifesto puts on record why private and corporate clients should certainly not regard insurance as an optional extra.
Even though individual perspectives may differ, the manifesto illustrates why confronting risk is no longer an option but “a question of survival”.
If anyone requires proof of that, we need only look at the companies which were so reliant on Business Interruption (BI) cover to help them through the Covid pandemic.
Figures published by the Financial Conduct Authority show that £1.5 billion has been paid out to more than 36,000 firms as a direct result of a landmark Supreme Court case about BI policies two years ago.
Nevertheless and perhaps reflecting the dynamic nature of risk, the BIBA manifesto reveals that the prospect of another pandemic ranks eighth out of the 10 most immediate threats identified by business leaders.
Risk doesn’t go away.
Even those organisations and individuals who survived coronavirus and lockdown know that for every challenge overcome, another waits around the corner.
Think of the consequences of the cyber attack on Royal Mail only a couple of weeks ago, an episode which was the subject of a ‘blog by Martin Lilley.
Consider too the data released by the Office for National Statistics (ONS) in October, which revealed that there were 42 per cent more business closures during July to September last year than the same period in 2020.
Company directors have voiced their concerns about acute current financial pressures but cutting back on cover for things such as liability, indemnity or Business Interruption can have catastrophic long-term consequences.
My colleague Geraint Jones wrote on this ‘blog in December about the potential dangers for both corporate and private clients by not taking out insurance.
Each year, the BIBA manifesto also tries to raise awareness of emerging and prospective risks, rather than only reacting to issues after they have arisen.
When it comes to insurers withdrawing cyber cover in the event of hacking of electric or connected vehicles, it is quite literally trying to read the road ahead.
By making policyholders, regulators and Government aware of our understanding of the issues and our continuing commitment to address them, I feel that the BIBA document really is of service.
From countless conversations with clients, I also know that risk should never be treated as something which is abstract. In that way, insurance becomes less vital.
Whether it’s protecting our businesses, loved ones, homes and possessions, we as brokers need to explain how things such climate change, regulation, war or even another pandemic can impact on us directly – and what we can do about.
Many types of risk are with us all the time.
Determining how we manage them should never be something that we only do on a policy renewal date but part of an ongoing, year-’round consideration of how our lives, businesses and the world around us change.
Written by Daniel Lloyd-John, Chief Executive, Broadway Insurance Brokers