As we all know, the last 12 months have severely tested our supplies of resilience and patience.
Despite enforced spells of home-working meaning that many people have spent more time with their families than normal, simply keeping households and businesses going has been a challenge.
Yet, as some of the restrictions are lifted and the UK’s economy prepares to gradually open up once again, I believe that it’s essential to dampen down any expectations that life either in or out of the office is going to instantly return to what we used to regard as normality.
In the last few weeks, the Bank of England’s Chief Economist, Andy Haldane, has forecast that the country’s financial fortunes are set for “a rapid-fire recovery“.
However, confidence of those working in the money markets does not always – at least, immediately – translate into a universal feel-good factor.
That’s because although Stock Exchange trading in the coming months may continue much as before, the world is a very different place for the rest of us than it was in March 2020.
As a broker which enjoys relationships with entrepreneurs and insurers alike, we know that reality is already biting for both.
The insurance industry was already dealing with the aftermath of the Grenfell fire disaster as the pandemic began and has been forced to respond to January’s momentous Supreme Court ruling regarding its handling of business interruption claims stemming from the impact of the restrictions which the Government put in place to prevent the spread of coronavirus.
To give you some sense of the impact of the latter, some £472 million had already been paid out in UK claims related to the case two months after the judgement, according to the Financial Conduct Authority.
Over the last few months, we have found ourselves reflecting on the possible consequences as we work with corporate clients to plan for the year to come.
Firms will step up productivity and their employees will head off on business trips once more. All of that requires liability and travel insurance.
Those companies and many others are finding, though, that cover is costing more than it did because conditions – the insurance industry’s response to the challenges which it has been confronted with in recent years – are decidedly different.
We are in what might be described as a ‘hard market’, the first such circumstances for a considerable while.
It’s one reason why, in launching its 2021 manifesto, the British Insurance Brokers’ Association (BIBA) underlined the importance of resilience.
As brokers, we not only help businesses and individuals obtain the cover that they need.
At times like these, we need to establish exactly what risks are involved in the work that they do and manage their expectations about the costs of obtaining the most suitable policies.
In that sense, our role is more vital now than when the economy is booming. We have to maintain a clear conversation with entrepreneurs and insurers to guarantee that both understand each other’s requirements.
That is where the current circumstances, in my opinion, offer a real opportunity.
The last year has focused the attention of businessmen and women on their commercial priorities in order to survive and, in some cases, thrive. From that clarity comes a better defined sense of risk and, as you may have noticed me remarking before now, insurance is all about risk.
Some businesses have deep enough pockets to – for instance – carry any financial or regulatory risks themselves. Most cannot and, therefore, have to decide what risks they will transfer in the form of insurance.
Being clear about the exposure to risk and firms’ attitudes or tolerance to it informs the cover which they require.
There is no doubt that not all the challenges posed by the pandemic are in the past.
Whilst an accelerated global vaccination programme appears to be putting the brakes on infection rates, Covid-19 will influence our home and working lives for some time to come.
Determining how we approach the future from that very point and how we deal with the risks involved is critical as to whether the economy recovers in the manner set out by the Bank of England.
On the basis of our discussions, I can say that the insurance world and the businesses which it covers are fully prepared for what lies ahead.
Written by Daniel Lloyd-John, Chief Executive, Broadway Insurance Brokers