Insurer bosses take a look back at the big stories of 2015 and look forward to the big topics that are likely to fill the headlines in 2016
Allianz chief executive Jon Dye
Q.What was your insurance highlight of 2015?
I was very pleased when the Chancellor announced what he termed a “major review” of the way claims management companies operate. This can’t come soon enough in my view.
Q.What was the most surprising event of the year?
There has been a lot of movement at a senior level within the industry – at broking houses and insurers – which I would not have predicted at the start of the year.
Q. And the most predictable?
That the commercial and household markets would be challenging places to get a decent level of rate strength this year – mostly because of the absence of major weather losses – until December!
Q. What will the big market issues be in 2016?
I will be taking a keen interest in the direction of private motor rates and whether the competition in the commercial market is as intense as it was in 2015.
Q. Do you think rates will harden or soften in 2016?
I know what I would like to happen but let’s wait and see.
Q. What’s your priority for 2016?
Running the business to maximise our potential for achieving good levels of profitable growth and doing all I can to ensure that we have a happy and committed workforce.
AXA Insurance technical director David Williams
Q.What was your insurance highlight of 2015?
Undoubtedly picking up the Commercial Insurer of the year award at the Insurance Times Awards in December! This represented such a massive turnaround from where we were in 2010 and made me genuinely proud of what we have achieved.
Q.What was the most surprising event of the year?
The speed and frequency of high profile broker departures and arrivals, some of them must have got dizzy in those revolving doors!
Q.And the most predictable?
The noise from the claimant lobby whenever there is any attempt to move to a system which is more efficient and better for the man in the street, but where they feel their earning opportunities might be impacted.
Q.What will the big market issues be in 2016?
Implementation of Flood Re and how that will be utilised by insurers, the Insurance Act where hopefully we can seize the opportunity to improve customer focus and our industry’s reputation in the process, and Cyber Risks where confusion over the wide variation in cover could do exactly the opposite!
Q.Do you think rates will harden or soften in 2016?
Harden, but not dramatically.
Q.What’s your priority for 2016?
Continuing to build on recent improvements for our brokers, with a particular focus on expanding and improving our eTrade offerings, and in Mid-Market where our claims and risk management services can make a real difference.
Lloyd’s chief executive Inga Beale
Q.What was your insurance highlight of 2015?
Opening Lloyd’s in Dubai has been part of an exciting twelve months that saw us increase our global access by appointing representatives in Colombia and Mexico, and gaining an insurance licence to operate in Beijing.
We also launched the new Lloyd’s Innovation Awards designed to create a culture that encourages, recognises and rewards innovation. Everyone talks about innovation being important, but the key thing is to turn that talk into action that can benefit the market
Q.What was the most surprising event of the year?
The Paris agreement – not that it was a surprising event, but there was a lot of scepticism about whether an agreement could be reached and if everyone would be on board. The fact we did see governments and business coming together is a big sign that we are moving to a place where we can take meaningful action to tackle the issues relating to climate change.
Q.And the most predictable?
Everyone is aware of the difficult global economic conditions and there was no change to the impact they are having on our industry. We’ve seen a surplus of cheap capital and market volatility affect pricing and reduce investment returns. These conditions are challenging for underwriters and brokers alike putting pressure on margins.
Q.What will the big market issues be in 2016?
We’ve seen a benign cat period for a long time, so it is always a concern that this relatively quiet period will end but, of course, that’s what we’re here for. In addition, the global economic conditions will remain a significant challenge. However, these hard times are also an opportunity for innovative, dynamic and creative insurers, who can thrive in these testing times. We also run the risk of being Uber-ised by a disruptive force so it’s vital that we push ahead with modernising the market.
Q.Do you think rates will harden or soften in 2016?
As an industry we have spent millions and millions understanding risk better and improving our predictive modelling capabilities. All of this with the aim of providing fair and consistent pricing for customers that reflects the risks and exposures that they have. It concerns me when this gets disregarded – questions must arise over sustainability when pricing falls below actual loss cost which is why we talk so much in Lloyd’s about the importance of underwriting discipline.
Q.What’s your priority for 2016?
I want to continue the important work we are undertaking on London Market modernisation – it is essential we continue to move forward and start effecting change that can ensure our industry and market can function efficiently well into the future.
RSA commercial managing director Jon Hancock
Q.What was your insurance highlight of 2015?
Seeing five of our Apprentices on stage at The Insurance Times Awards in the top 10 of the industry Apprentice of The Year awards, and seeing two of them walk off with the top awards. A very proud moment, and pleased to see our future in such safe hands.
Q.What was the most predictable event of 2015?
Floods! We all know the bad weather is coming at this time of the year, but still pray it doesn’t - and if anything it appears to be getting worse each year. We work together with our customers and brokers to ensure they are prepared in case the worst does happen, but we all know insurance is an important but only part of the answer - we have to see some real investment in defences to protect the unfortunate folk affected.
Q.What will the big market issues be in 2016?
Competition will remain high I’m sure, and I think the heavy burden of regulation will continue to be a huge challenge for all of us in getting the balance right of being lean, competitive and always there for our customers. And the Insurance Act - very welcome and long overdue, and a great opportunity for a different and even better “contract” between customers, brokers and insurers.
Q.Do you think rates will harden or soften in 2016?
As ever it will depend on customer and segment, but I suspect generally there won’t be too much movement on rates either way - still some downward pressure for sure, but not a lot of room given such competitive pricing already.
Q.What’s your priority for 2016?
Getting closer and closer to our brokers and customers. I know that sounds obvious but if anything it becomes even more important as the world and our industry are changing faster and faster - whether it’s the continued march to eTrading, more and more self-service, changing cyber and political risks, introduction of the Insurance Act and much, much more. We need to help our customers understand changing risks and the different opportunities they have.
Aviva UK general insurance chief distribution officer Phil Bayles
Q. What was your insurance highlight of 2015?
Receiving lots of accolades for the quality of service we are providing to our brokers and customers plus the Autumn statement announcements that take on board many of our ‘Road to Reform’ suggestions around replacing cash with care for minor injuries.
Q.What was the most surprising event of the year?
Maybe we should have seen it coming but the big increase in insurance premium tax (IPT) was an unwelcome surprise and hits consumers and businesses straight in the pocket.
Q.And the most predictable?
The lack of any significant rate movement in commercial classes.
Q.What will the big market issues be in 2016?
Insurers, brokers and clients getting used to working within the Insurance Act and I suspect flood defences and the scope of Flood Re following the current flooding.
Q.Do you think rates will harden or soften in 2016?
I think rates will continue to harden in private motor and we’ll start to see some hardening in commercial motor as well. I would have said flat for property rates but there might be some upward movement depending on how bad the losses of the past few weeks turn out to be.
Q.What’s your priority for 2016?
To continue delivering the high quality of service we delivered in 2015 to our brokers and customers, keep leading the market on critical issues like whiplash reform, keep the underlying profitability good and deliver some decent growth - we want to be boringly consistent.
ABI director of general insurance James Dalton
Q. What was your insurance highlight of 2015?
There has been some real progress on reforms to tackle the UK’s compensation culture particularly the significant breakthrough in the Autumn Statement with the Government proposing to reform the approach to minor injuries. We have successfully lobbied the Government to bring forward measures to increase the Small Claims Track limit from £1,000 to £5,000 which should help insurers bring down the cost of motor insurance.
With a number of milestone achievements in 2015, Flood Re has now been formally designated by the Secretary of State for the Environment, Food and Rural Affairs. The ABI has been instrumental in establishing Flood Re, a world first insurance solution for high flood risk properties and is on track to launch in 2016.
The Insurance Fraud Taskforce took-off in 2015. Throughout the year, the industry has worked collaboratively to counter insurance fraud. The recommendations made by the Insurance Fraud Taskforce and the Government’s review of claims management companies promise to further increase the industry’s resilience to insurance fraud in 2016.
Q.What’s your priority for 2016?
The ABI will continue to support the Government’s work to bring down the unnecessary costs in the motor insurance market and we look forward to contributing to the Government’s consultation anticipated early next year.
Given the recent floods in Cumbria, improving consumer understanding of flood risk and how customers should protect themselves is a key priority for the industry. We will carry on campaigning for flood risk information to be up front in the home-buying process through estate agents and property search websites. It is important that everyone has access to the right information, including a home’s flood risk area so people can make fully informed decisions when buying a home.
The ABI understands how important it is to champion the insurance sector, to policymakers and regulators in the UK, EU and internationally. To support commercial lines insurers and the London market, the ABI will continue to advocate for a competitive tax environment for UK-based insurance firms.
With the UK experiencing a number of cyber-security breaches this year, the ABI will continue with its work to promote the significance of a UK cyber insurance market.
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