The challenges presented by COVID-19 will be by far the biggest talking point of the SIRC 2020 Re-Mind virtual conference, taking place this week in place of the physical 17th Singapore International Reinsurance Conference, which has been rescheduled to November 2021.
Some 88 percent of respondents to a survey carried out ahead of the virtual event by Intelligent Insurer said that was the one issue it was impossible to avoid at the moment.
“We need a complete rethink as an industry around who we recruit and why.”
“Every conversation starts and ends with COVID-19, there is no escaping it. The most difficult thing is not knowing how or when the situation will end,” said one respondent.
Another added: “It is not just about losses, there is also the challenges around remote working and a lack of travel, plus the industry is grappling with how to clarify this exposure in the future. That said, some of the virtual conferences have been very well done. SIRC has done a great job.”
The second biggest theme will be the dynamic around rates and terms and conditions, respondents indicated. “Hard markets do not come along very often so the industry needs to make the most of this. That said, the reasons behind it relate to a fundamental lack of profitability in the industry and some real structural problems that must be managed,” a respondent said.
“The most difficult thing is not knowing how or when the situation will end.”
Another added: “Asia is lagging behind when it comes to rate increases but we are seeing momentum grow, which will be very much welcomed by carriers in the region.”
The third biggest talking point will be the challenges of growth, according to respondents.
“People can talk about growth potential and things like the protection gap in theory, but translating that into hard premium is tough,” one said.
“The hard market will deliver growth for the time being but there is a longer-term challenge around how this industry stays relevant.”
The fourth biggest talking point will be insurtech, respondents said. Several commented that the challenges of COVID-19 will accelerate the adoption of technology in the industry. Some of the other key talking points identified by respondents included alternative capacity, consolidation and regulatory change.
“Hard markets do not come along very often so the industry needs to make the most of this.”
Pressure on rates
Similar topics emerged when respondents were asked what they see as the major challenges facing them. COVID-19 again topped the list followed by some concerns over rates not increasing as expected and clients buying less coverage in some instances.
“The reality is that until we get through January 1, all the talk of a hard market is just talk. The reality of negotiations could be very different,” one said.
However, a healthy number of respondents indicated they were very satisfied with business at the moment—35 percent said they felt business was good and had few worries.
“Yes COVID-19 has presented us with challenges but rates are increasing and we see opportunities everywhere at the moment. This is a great time to be in this business,” one said.
“There is a longer-term challenge around how this industry stays relevant.”
This optimism also translated into some interesting views on where opportunities will exist. A high number of individuals said they felt they could increase market share in existing lines, while more than half felt they could improve profitability and expand into new lines of business.
Finally, the survey asked respondents to identify other issue important to them right now. Talent management topped this list followed by the change triggered by COVID-19, new and emerging risks and climate change. The talent question prompted a few explanations.
“The industry is adopting technology extremely quickly yet we do not have the right people to understand it,” one said. “We need a complete rethink as an industry around who we recruit and why.”
Another added: “I have a real concern about the future leadership of this industry. We are heading for a talent cliff in about five years and the industry could suffer from a lack of direction if it does not get better people in senior roles fast.”
SIRC, Survey, COVID-19, Insurance, Reinsurance, Asia-Pacific