Airmic – When is hospitality a bribe?

The Airmic 2012 conference has already revealed some interesting insights into risk managers that raise questions for general insurers and brokers.

One is risk managers’ attitudes to the Bribery Act. According to Miller directors’ and officers’ specialist Richard Watts, the act’s muddled wording on what is acceptable corporate behaviour is a big worry for UK risk managers.

As well as covering obvious cash bribes, the act extends into corporate hospitality. For insurers and brokers, this raises the question: what do risk managers think is an acceptable level of hospitality?

It’s a thorny issue. If what Watts says is true, there are a lot of cautious risk managers out there. For insurers, hospitality is a long-established part of getting clients, but there is now a risk that a cautious risk manager would interpret some sorts of hospitality as bribes and go to a rival instead, regardless of the quality of cover on offer. This is a real concern, for example when foreign clients visiting the UK arrange back-to-back meetings with different brokers, leaving few opportunities to rearrange.

Sector ‘set to expand’

However, it’s not all bad news. The insurance sector is expected to start expanding this year for the first time in five years, according to research by market research firm IBISWorld.

The research found that insurance revenues have shrunk by an estimated compound annual rate of 4.3% since the recession.

But now the sector is expected to grow by 5.7% in the 2012-13 year as consumers build their assets and free more disposable income, leading them to buy more insurance.