Anyone reviewing the insurance events of 2017 would be forgiven for thinking they'd stepped on to a rollercoaster. But while there have been plenty of highs and a fair few lows, the insurance industry has demonstrated it has the nerve for even the bumpiest of rides.
The year's first big dip came in February, when the Lord Chancellor announced the Ogden discount rate was being cut from 2.5% to minus 0.75%. The scale of the cut meant that £7bn was added to the cost of personal injury compensation payments across the market, leading to reinsurance rates and premiums following the same upward trend. An unstable political environment arising from the Brexit decision and the snap general election caused further uncertainty for the market.
Further low points came with the tragic events of the Grenfell Tower fire and the terror attacks across the UK. The scale of these events had significant ramifications for the insurance industry, leading to reappraisals of everything from building regulations to terrorism cover.
On the up
Thankfully there have been plenty of high points in 2017 too. In particular, the industry can be applauded for the way it responded to these challenges. For instance, in the aftermath of the terror attacks and the Grenfell Tower fire, insurers made sure claims were settled quickly and ex gratia requests were considered sympathetically where those affected had gaps in cover.
At Allianz, we've worked hard to support brokers throughout these ups and downs. Following the Ogden discount rate announcement, our branch network came into its own, offering brokers on the ground support to deal with the changes. We've increased our visibility by getting our underwriters, as well as sales teams out to meet brokers, so both parties can gain a better understanding of how they can work together.
Being able to access support at a local level is highly appreciated. As well as helping us to build stronger relationships, it's also meant we've picked up a number of awards in 2017. Some of these include the Commercial Motor (Fleet & Trade) Team of the Year; Small Commercial Combined Team of the Year and the General Liability Team of the Year at the Underwriting Service Awards; the Personal Lines Team of the Year at the Claims Awards; and the Brand Management Award at the British Insurance Awards.
The strong relationships we have with brokers has also enabled us to launch a number of new products and initiatives. Our Complete Mini Fleet proposition, which was launched in November, is an e-trade proposition enabling brokers to arrange cover quickly and easily for fleets of between three and eight vehicles, growing to 15 at renewal.
We also took our initiative to tackle SME underinsurance a step further this year. Having announced in 2016 that we would no longer be applying average to SME products, this new data initiative alerts brokers at quote stage when a client is at risk of being significantly underinsured.
The summer also saw the launch of our new, significantly enhanced construction proposition, which is built around three dedicated construction trading teams. As well as being able to access technical expertise whenever required, our modular policy, Construction Select, offers 24 separate covers that brokers can tailor to suit their clients' needs.
New Year predictions
2018 will bring no respite from further change, from the Insurance Distribution Directive in February, to the FCA’s Renewal Transparency requirements in April, followed by the General Data Protection Regulation in May. We’re working closely within our business and with our brokers to ensure everyone is cognisant of the new rules.
The market will sustain further uncertainty and challenge from the anticipated review of the discount rate by the Lord Chancellor. However, with Brexit dominating the parliamentary calendar, the necessary legislation is unlikely to be passed until Q4 at the earliest.
At Allianz we're also looking forward to a busy year of change, with the launch of the UK's third largest personal insurer, in the shape of the joint venture between Allianz and LV=. This brings together the expertise and experience these two brands have gained in the commercial and personal lines markets, which when underpinned by a solid investment in technology, automation and data driven initiatives, means our brokers and customers can look forward to excellent customer service, an increased product offering and greater innovation in 2018.