COVID-19 accelerates take-up of some specialist classes: Beazley

As well as triggering a hard market, COVID-19 has accelerated the growth in certain specialist classes of business, including cyber and virtual care, Lucien Mounier, head of Asia-Pacific, Beazley, told Intelligent Insurer, speaking during SIRC 2020 Re-Mind.

Mounier said that this is taking place against a backdrop of a general hardening and an increase in demand for reinsurance although he noted that rate hikes are slower in Asia than elsewhere.

“We’re in a reinsurance environment now in which rates are hardening and demand is increasing. This year Asia has suffered a series of major floods and typhoons coupled with a number of large risk losses, which is triggering a tipping point of long-overdue treaty market hardening,” he said.
“I see us using business travel more strategically in the future.”

“We are well-placed to take advantage of rising rates and we’ve already seen rates rising more than planned across the majority of our products. On facultative business, rates in Asia are generally rising across specialist classes of business, albeit at a slower pace than elsewhere, including the UK and US.”

He said that Beazley sees strong opportunities to continue building its specialist product offering across this region and developing innovative solutions to address the changing risks that clients face. Some of the areas where it eyes opportunity for growth include virtual care and life sciences, cyber and mergers and acquisitions insurance.

“Market appetite is maturing and we have been building the bench strength to be well-positioned to grow. As well as product development, we’re developing our distribution capabilities with investment in our e-trading broker platform, myBeazley and partnerships model, which supports our strong focus on diversification,” he said.

“This is a challenging trading environment, but hardening rates and the disruption of the pandemic have created opportunities to innovate and do things differently. Ensuring we are in the best possible position entering 2021 means having the right team, products, structure, mental wellbeing and motivation, and building these capabilities are our priorities.”

“We are well-placed to take advantage of rising rates.” Lucien Mounier, Beazley

A blended way of working
Mounier added that operationally, the industry has adjusted and adapted very well to a new remote working environment and virtual ways of conducting business. And, he believes, when physical travel becomes possible again the industry will benefit from leveraging a blend of virtual working with face-to-face meetings.

“The adjustment has been supported by the strength of existing relationships, but it is undoubtedly tougher to build new relationships virtually with brokers and clients,” he said. “A resumption of more business travel and events next year combined with hybrid approaches to working practices that will inevitably outlast the pandemic, would bring a new dynamic to the market.”

He continued: “As the region recovers from COVID-19, there comes an interesting challenge of retaining the best of what we’ve learned during this period and combining it with the best of what we used to do pre-pandemic.

“I see us using business travel more strategically in the future rather than returning to how things were, and continuing to use virtual events both internally and with clients and brokers, and harnessing the more inclusive feel that they can often bring.

“How different businesses and individuals choose to work in the future and how the working environment changes is going to be interesting.

“More companies, such as Beazley, are adopting a flexible model that gives employees more freedom to choose where they work most effectively whether that is in the office or elsewhere, and provides ways for firms to differentiate as employers among potential recruits,” he concluded.