As we come to the end of the year we can look back at what has definitely been a year like no other. COVId19 has hit the world’s economies hard and the global insurance market was no exception. There are still some large business interruption claims being challenged in the courts, which will set an interesting precedent for future insurance business. However, I don’t think we will be able to assess the full impact of the pandemic on the market until way into ٢٠٢١. As a consequence, we have already seen pressure on capacity here in London, with some large players pulling out of certain classes, particularly in the casualty area.
On a positive note, and if we can draw on our experiences to benefit the market in the future, insurance companies moved very quickly to a remote model. Those who had invested in online platforms clearly had a distinct advantage. I believe that technology will continue to have an important role to play in development of our industry going forward.
2020 was also a year for consolidation, with a number of high-profile mergers, both in the reinsurance and the broking sectors. The recent purchase of RSA is set to be the biggest acquisition of a UK-listed company in ٢٠٢٠. Although capacity has shrunk in some areas, new capital is expected to enter the market next year, attracted by the returns on hardening prices. I also believe that MGAs will become even more influential in the evolution of our market to support global distribution.
COVID-١٩ has been so prominent in our lives this year, but we have also seen some devastating events that have resulted in the tragic loss of lives and have had a catastrophic impact on the economy of countries. The fatal incident that rocked the Port of Beirut in August this year was a ١ in ١٠٠ year event and no-one could have predicted it at any level. Human tragedy cannot be quantified and we know a number of companies who have been directly affected. In terms of the insurance, the market will have a key part to play in helping to rebuild the community, but the long term impact will mean that the appetite for business in this country will decrease due to political and economic exposures brought on by this event.
Looking forward to 2021, I don’t believe that COVID itself will have an effect on pricing, but what it will mean is we will see a tightening of wordings and conditions, plus closer scrutiny over coverage that was previously given away for free. The structure of the market will continue to evolve, but it will be a sell-balancing act between new capital entering the market and insurers tightening their belts.
For us at Connect Underwriting we are yet to close our books for 2020, but we have had a successful year and we look forward to further growth in 2021. This is our third year of underwriting and we continue to grow our book exponentially. We are considered to be a boutique capacity provider and our strategy is to be selective, so our plan for 2021 is to grow our book broker by broker, to generate a critical mass of business, whilst the market is
.still conducive
