What are your thoughts on the insurance market, and the challenges it faces today?
On the whole our insurance market is exceptionally buoyant; all the major industry players operate here, and research indicates that there is real optimism about the future. Personally I am a big believer that change brings with it great opportunity, but even I was surprised about quite how high confidence levels appear to be, given the uncertainty we’re all facing at present.
It’s an extremely encouraging scenario, and of course confidence breeds confidence, which is great – provided it’s kept in sensible check and is based on reality. Today there are a multitude of challenges for the insurance industry; some are long-standing, such as the high cost of claims, and some are more dramatic and unexpected – such as the extreme weather events of storms Ophelia and Emma, and the cost of them to the general insurance market.
Then of course there are perennial industry challenges of over-regulation, cyber threats, skills shortages, and keeping pace with the speed of technological changes.
Of course Brexit is the biggest issue affecting the market’s outlook, but for a bit of perspective and calm I wanted to first outline some of the other things our industry must also deal with – Brexit is not the only show in town, despite that it is likely to prove to be the most spectacular. It comes with a long list of concerns and unanswered questions, foremost of which is that of the ‘hard’ border. With most insurance industry players in Northern Ireland reporting into headquarters across the border, it’s something which is likely to have a major impact.
But even those of us taking up a confident stance on Brexit are simply not yet in possession of the details by which any prudent and thorough assessment of the threats can be measured – so moving on to detailed planning of how best to exploit the opportunities is not yet possible, which is a little frustrating. What we do know is that the changes will be seismic.
What about the legal expenses market? Where is that at the moment?
The legal protection market continues to grow steadily here, and is helping customers every day.
As with general insurance, there are challenges around claims cost, regulation, cyber, skills, and technology but added to that is the additional challenge of where this product sits with the customer. At worse it could be referred to as apathy, but I think that is an unduly negative tag. It’s more the case that so many people just don’t know about legal protection, and what it could help them with.
That’s why we are working closely with our broker business partners to find ways to increase awareness, and educate, particularly around what a customer should do in the event that they have a loss, or require legal advice. It’s a major piece of work, but it’s so important in terms of bringing affordable access to justice to as many people as possible.
How will the legal protection sector develop in Ireland?
Innovation and communication are key here, as I would argue that they always were. I see an effective modern provider listening more closely than ever before to broker business partners, and I think that that represents a really important, positive shift. Insurers need to find out what broker’s customers want, and then using things like behavioural economics, to help them articulate the message of legal protection and its considerable merits.
Then there is the innovation that I believe is completely necessary for our industry to thrive in the long term. Not just necessary – it’s inevitable. Innovation is about investing in new ideas to retain relevance and it’s crucial to the continuing success of any business. Efficiencies and marketplace consolidation are vital of course, but we also need to keep a careful eye out for what’s ahead, particularly with the threat on the horizon of non-traditional players entering the market.
What we’re trying to do at a group level at DAS is to accept different ways of thinking about insurance, what it does, what it needs to do, and what it means to different generations, to try to discern the most effective way to distribute a product that supports all our broker partner’s customer needs.
How can insurers rise to meet the challenges of the hour?
So for me the key is keeping up with both technological and societal change – the two being inextricably linked. Insurers need to provide products which give value to the people who use them, by covering the types of risks customers are facing today, using a contemporary platform which reduces friction and inefficiency and enhances the user journey.
As an industry we’re not exactly famed for embracing bold new frontiers of innovation, but I believe that’s changing; long term commercial sustainability means that it has to.
Benefitting from our group pool, at DAS we’re working with and learning a great deal from the experiences of the DAS UK Group, and are currently exploring e-trading, cyber insurance, insurtech collaboration and voice technology, which is really exciting, progressive stuff.
You’ve talked about the opportunities of Brexit. Could you expand on that?
Brexit is the number one disruptive influence in our insurance market today, because of all the uncertainty. But we’re looking at it as a significant opportunity, you have to – albeit one which the parameters of are as yet unknowable.
Our EU passporting benefits, our status here as the only ‘English speaking’ country in the union, and our common-law structure – which mirrors that of the UK – make us an attractive relocation proposition for many companies across the channel. The sense of the possibilities before us is exciting and tangible.
But one of the big potential boosts for DAS here is that we will get to work far more closely with the larger group companies we are part of, DAS being part of the major European insurance presence Ergo, who are in turn majority owned by Munich Re, one of the largest reinsurers in the world. The decisions Munich Re will take as their global response to Brexit will impact on all of its businesses, and we are really excited to be part of that, and to be so well positioned.
What about GDPR, the other ‘iceberg’ of the moment. What do businesses need to be wary of?
With personal data being referred to by some as the new oil, this shift in European data rules is designed to give enhanced protection for people’s valuable personal information. But you know that Brian – goodness knows you’ll probably have had as many emails as me about it. But it’s a change that will have an impact on businesses across the board, and the new rules do come with teeth. There is mandatory reporting, the potential for higher fines by the regulator, an individual can claim compensation for breaches, and then there is the increased reputational risk that comes with all of those.
But again there is opportunity here, and building – and being seen to be taking care to build – a strong data protection platform builds trust.
I heard a mischievous rumour this week that the powers that be may actually struggle to take action against companies who breach the new rules, on the basis that so many of their staff have left to become GDPR consultants! My advice would be not to test that theory, which is likely to be untrue, however amusing.
How is the team at DAS developing? What are your plans?
DAS continues to grow, and I’m pleased to say that our team is growing. We have recently strengthened an already accomplished group, and all of our staff have insurance qualifications, industry experience, local market knowledge and contacts, and of course that crucial customer-centric approach.
As a business our focus remains on the Broker market, providing legal expenses cover for personal and SME clients. We’re about to launch an exciting new product actually, which will be a technological leap forward, but I’ll tell you more about that next time.
Brian, there is a certain bitter sweetness to this interview as I’m aware that it is your last one at Brokers Ireland – I feel rather privileged! I take this opportunity on behalf of myself and DAS to thank you and wish you the very best in your next venture, and I look forward to our business paths crossing in the future.
You can contact DAS Ireland via:
T: 01 670 7470