Authored by Nick Hobbs, Chief Distribution & Regions Officer at Allianz UK
VUCA - Volatility, Uncertainty, Complexity and Ambiguity
Welcome back (to) BIBA
After three years, we are back to Manchester for the “annual” BIBA gathering. We’ve missed it - and the chance to connect with current brokers friends and some potential new ones.
Perhaps an odd thing to admit but we are excited about our stand this year as it is our (BIBA’s?) first fully sustainable stand, with almost wholly recyclable materials in its construction and carpeting plus compostable glasses and cups (which we will use, wash and reuse of course) for those who join us on it.
You might also have seen that we have been generating the power needed for our stand in the build up to the event in the form of a kinetic exercise bike, a meaty rechargeable battery pack and some able bodies.
Allianz colleagues and visiting broker partners in our London and Manchester offices have slogged themselves over many hours to charge the pack - which in turn will help power the essential fridge, fans and inevitable phone chargers needed for the full BIBA experience. Please come and sees us and feel free to benefit from their labours.
Three years? It felt longer….
It has been a long absence. It’s also been a full three years. In that time the insurance profession, reflecting the experiences of our customers, has had to show the utmost agility and resilience in the face of significant uncertainty. There is no question though that the uncertainty continues.
Recent times have again given prominence to the term “VUCA”. Pronounce it as you wish. The one with the hard c feels most appropriate. Given its origin many years ago at the US Army War college then that’s probably the right one too.
VUCA: Volatility, Uncertainty, Complexity and Ambiguity. Four words that most adequately describe the present time and a nice categorisation for the many new challenges being thrown at our customers, their business processes, their trading, their employees. There is no predictable cadence to it of the sort that recessions of old might generate. It’s all a bit chaotic and undoubtedly impacting decision making, business risk appetite, confidences, abilities to grow etc.
Example: a business looking into new tech to bolster its business. Superficially advantageous but what risks now need consideration when making that purchase? Cyber resilience, replacement part availability, servicing, relative obsolescence, robustness. All that would have been assessed in the past and decisions made but now superimpose on that Brexit, Covid, currency shifts, sanctions, environmental changes, civil issues, inflation, very real and present cyber threat, rapid economic/legal/regulatory shifts and major geopolitical change….. Phew.
Given all that “VUCA” then is it any wonder that business investment, productivity and confidence is faltering.
What’s needed and what can we do?
A few less things to think about would be nice. VUCA means instability and unpredictability. Great if you are a trader in certain fringe markets. Bad for everyone else. So, whatever you think of him or his politics, the recent re-election of Macron is to be welcomed - for the stability it enables in France and across Europe at this moment. It steadies that ship.
For us as a profession, similarly, we provide a stabilising service. Our products may sometimes be a grudge purchase but probably never less so than now. We provide some better degree of predictability. We can’t cover all eventualities but by maintaining the standards in our profession, by providing sterling and reliable advice, by enabling products that fit or respond to the uncertainty of our time with greater certainty of outcome in the event of business strife or loss, by great partnering (broker/insurer), by ensuring the best outcomes…..
Dare I say also, as I once worked for the august company that coined the expression: by not making a drama out of a crisis.
And to that end it pays to be informed. I’ve asked my team to become a little more expert in the subject’s matter/subject matters (?) of VUCA: what that might mean for our customers and what insurance and risk and service provisions can best attend to them. It won’t always need to be complicated - a better approach to indexation on inflating exposures is a good start - but a little more understanding of the things that keep our customers awake at night brings us into better alignment with our broker partners.
On the eve of BIBA that’s no bad thing.