In a hardening market, it is increasingly important to find synergies on the back end that cut frictional costs.
When the lockdown hit in March/April, we saw some clients postpone decisions on their RFP. Others suddenly wished to dial down their coverage and take more risk on the balance sheet, in a way, adopting a survival mode mindset.
Three weeks later, business bounced back. We put the dip down to the psychological shock. Almost the whole world was suddenly working from home. Who could have imagined that? It’s a lot to take in, and little wonder that enquiries briefly dried up. Everyone was busy making a new plan.
When you look at businesses forced to completely reinvent their business model overnight – such as catering firms that have become 100% online operations or manufacturers making completely different products to stay relevant – it makes me smile how inventive and resilient people can be.
We are fortunate at Howden. I believe our strategy is more relevant now than ever. In a hardening market, it is increasingly important to find synergies on the back end that cut frictional costs.
Smaller brokers will probably have to consolidate to achieve that – I expect a lot of post-COVID M&A activity – but we are able to roll out digitalisation projects that bring efficiencies throughout our global group.
Our in-house data and technology arm, Hyperion X, is the key to many of these initiatives, from frequent insight reports to digital solutions that help take the friction out of the underwriting chain.
Meetings without borders
Some of my team members are hundreds of kilometres apart; they are now integrated to the point you do not even notice they are geographically separate anymore.
Getting the right people in the room – or the Zoom – has never been easier. We have brought together client CFOs, risk managers, local brokers, product specialists in London and Dubai, and underwriters from relevant markets, all dialling in at what would have been impossibly short notice before, working together in the good humour that shared adversity often brings.
Will we embrace agile working more? As a group, yes. It is something we have been working on for some time.
But we must remember, and this might come as a surprise, people actually do love the office. During lockdown, we received many calls from our colleagues saying how they were looking forward to come back to normal office life.
It’s a home-from-home for many. They come to see their friends, feel supported and part of something. This is especially important for expatriate workers, where the office is usually the main source of socialisation. We run Howden with a ‘people first’ mindset, so we want to make sure everyone gets the support they need.
Everybody is more risk averse now
Clients are wising up to the latent risks they face: risk managers and CFOs are more willing to have the conversation about cyber cover now. When everyone is working from home, every day brings a strong, visual reminder of the reliance on technology.
Equally, HR managers are working to ensure that their employee benefits and medical provisions are up the mark – COVID-19 has accelerated the health and well-being conversation, making it truly mainstream.
New product innovation and challenges
Hyperion X has also been studying the post-COVID-19 appetite of major carriers. It is mostly quite buoyant, except for one area: new product innovation.
Insurance innovation is so important right now. For example, starting some conversations on a public-private-partnership pooling collaboration between governments and the insurance industry, similar to what we saw after 9/11, could go some way to improving business confidence in 2020/21. It could underpin the global V-shaped economic recovery we are all hoping will happen. M