In a guest blog for youTalk-insurance Simon McGinn, General Manager, Commercial and Personal at Allianz UK shares his thoughts about 2018 and takes a look at what’s in store for the year ahead
During 2018 we saw another busy period of legislative, political and socio-economic change. As an industry we needed to respond to major developments which impacted the insurance sector, such as General Data Protection Regulation (GDPR), the Insurance Distribution Directive (IDD) and the progress of the Civil Liability Bill through Parliament, to name a few.
Undoubtedly Brexit has dominated the agenda during 2018. As the Government continues its efforts to finalise the Brexit deal, each day brings new twists and turns. Clearly there are still many unknowns, following the delay to the MPs vote which had been due to take place on 11 December.
The UK economy is already starting to see some reactions to our planned departure from the EU, including rising labour costs, higher inflation levels and a devalued pound. As a result, it’s perhaps not surprising that wage growth is at its fastest for nearly ten years and with uncertainty rising it’s unsurprising that there is a reluctance to invest; indeed business investment fell for the fifth consecutive quarter in Q3 2013. All of these factors have very specific impacts for our industry, not least in the area of claims costs causing challenges for customers, brokers and insurers.
The main challenge for all of us, not least brokers and customers of course, remains that lack of detail around any transitionary period and so providing reassurance as to how insurers are intent on handling the variety of scenarios in play is critical. Whatever the outcome of the next few months, we can be certain that changes will undoubtedly be required. Nevertheless, Allianz and the industry has continually proven itself to be extremely resilient and adaptable. I have no doubt it will continue to be during 2019.
This year we finally saw progress with the Civil Liability Bill and despite a last minute attempt to amend the proposed whiplash legislation in October; the Bill has now passed through the House of Commons. We have been vocal in our support for measures which seek to compensate genuinely injured people quickly and fairly without influence from disproportionate legal costs, so we welcome the whiplash claims provisions within the Bill. The principle of fairness is also embodied in the industry’s position on the Discount Rate and the measures announced provide a structure around which this can be achieved. We look forward to seeing the Bill progress into Law and to the benefits that will accrue to customers as a result.
Theft is on the rise
During 2018 we’ve seen a worrying rise in theft claims across several lines of business, including commercial theft, construction plant machinery, and vehicle and bicycle theft. This trend is consistent with behaviour that would normally be associated with an economy in recession and initial research seems to point at a number of factors.
Technology is a driver of theft, with online ‘how to’ videos providing information on how to start up vehicles, while street view sites can let criminals scope out a property from the comfort of their own home. Regrettably, online platforms also provide a channel to sell on stolen property. At Allianz we are constantly working to combat theft and provide risk and security advice to our brokers and customers. With high-tech and more traditional theft on the up, understanding these latest trends is an important step in tackling them.
2019 and beyond…
Brexit will be the key topic for most organisations in 2019 as the 29 March deadline approaches. However, it’s important that we don’t lose focus on other areas, such as key legislative updates; this includes the passage of the Counter-Terrorism and Border Security Bill through Parliament and the outcome of the FCA Dual Pricing Review.
For Allianz, 2019 will be another busy year as we continue to make big strides with our strategic Joint Venture with LV=. The transfer of business is now well underway and we’ve received very positive feedback and achieved good retention rates, thanks to the determination of our people to make the process as smooth as possible for brokers. Our priority remains maintaining the highest levels of service for our customers and brokers under both brands as the partnership progresses. We’re excited about this new era for our company and very much looking forward to the opportunities that this partnership will provide for us and our broker partners next year and beyond.