Jamil Elbahou, CEO and Chief Underwriting Officer at Connect Underwriting, a London-based MGA and insurtech, discusses how the pandemic has changed the market’s relationship with technology and how the winners will be the ones to embrace this change.
I think we can safely say that life post COVID-19 will be different for everyone and without a doubt, the global insurance market will have to adapt and embrace the changes required to exist and thrive in a post COVID environment. However, there has been some positive outcomes and although we have by no means come out the other side as yet, some sectors of the insurance industry have managed to prosper, confirming the need for their existence and their importance in the future development of our industry.
At a global level, there are so many classes of business that COVID has impacted – business interruption, event cancellation and insurance in the travel industry, to name just a few. In fact, claims relating to any non-physical damage elements of a policy are under scrutiny. We are yet to see the full impact that COVID-19 has had on the global insurance market and time will tell. We are still awaiting the verdict of some high-profile cases that are going through the courts, to see whether insurers will be forced to payout COVID-related claims. From that point we will be able to place an estimate on what the true fallout of COVID will have had on our industry.
At a local level, the effects have been entirely dependent on the hold the virus has had on that particular country or region. Talking from my own personal experience of owning and managing an MGA underwriting business based in London, COVID has definitely changed the way we do business here in the City. Lloyd’s has always been at the heart of the insurance market in London and although the market has come a long way in terms of embracing technology, face-to-face relationships and the traditional broker to underwriter interaction remain a key part of the insurance community. However, with lockdown moving relationships online and the closure of the Lloyd’s building – the marketplace hub, business has continued, it hasn’t come to a halt. We have simply evolved how we communicate and a lot of the business has moved online. PPL, The London insurance market's ePlacing platform, reported that market usage reached an all-time high throughout the July renewal period, binding thousands of risks on a daily basis.
For those of us operating in the insurtech space, remote working and the need to communicate and transact digitally, has been a positive and has confirmed the importance of electronic trading in the future of our industry. With everyone working from home, the demand to purchase both retail and commercial insurance online, has fuelled the growth of the MGA and insurtech sector, creating a very positive outlook for everyone involved in this space.
Having the technology in place to be able to carry on and grow your business in this environment puts you in an extremely good position and gives a great competitive edge. At Connect Underwriting, we have not experienced any resistance from our broker distribution to operate and work with us remotely. We were already structured to operate in a remote environment, so for us it has been business as usual.
In my view, the pandemic has changed the market’s relationship with technology. Technology has become the enabler and in the future, those who embrace technology will be the winners in this market. Traditional insurers must stop seeing MGAs and their insurtech solutions as competition, but as an ally and a means to expand their own distribution, both digitally and geographically. We all still need capacity, so those insurers who see our sector as a collaboration opportunity, will be the ones who flourish in the future.
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