Jonathan Tritton, senior vice president at Acrisure London Wholesale, says 2022 warns late adopters will fall ever further behind the curve on ESG.
Historically, the insurance industry has not always been the best at embracing change, but the past two years have forced people to look at things differently.
The market successfully adapted to a new hybrid working model which in turn has resulted in a plethora of new business opportunities. During 2021, the market saw an increase in the amount of business flowing into excess and surplus lines, which has resulted in a harder market that should remain throughout 2022. Intangible insurance such as reputational risk and intellectual property risk will become more prevalent for insurers as such risks become increasingly unpredictable and difficult to quantify.
Cyber is also a rapidly changing market and, during 2022, we could see some significant MGAs struggle to renew their capacity, which could change that market significantly. During 2021, Lloyd’s gave a three percent innovation stamp to businesses willing to try new ideas and some underwriters are creating dedicated innovation teams to experiment with new concepts, which will benefit the market overall. We have seen, and will continue to see, more opportunities to embed technology into insurance offerings right at the point of sale, which, in some instances, could make brokers redundant.
As a tech-enabled broker, Acrisure leans on technology to make it more efficient for everyone. If we can pre-empt an issue that a client might have before they realise that they have a problem, we have succeeded. And that’s exactly what we’re looking for – spotting trends in different markets, geographies, and lines of business, which could help us to solve a problem for our clients. In addition, we will continue to see an increase in the use of technology within the market.
The risk posed by environmental, social and governance (ESG) issues also became a stronger focus for the industry. In October, Beazley launched the first ESG syndicate within Lloyd’s which, beginning January 2022, will exclusively focus on offering additional capacity to businesses that perform well against ESG metrics. This should incentivise other organisations to follow suit. As with most things in the insurance industry, there are some bold organisations that will adopt new ideas quickly and there are others that won’t. The slower adopters might be playing catch up for a while. In the same vein, climate change driven loss activity has forced insurers to rethink their underwriting policies and modelling strategies. Most of the market is taking a proactive approach to mitigating climate change, whether it be ceasing to insure fossil fuels altogether or choosing not to renew certain policies.
2021 was undoubtedly a turbulent time for our industry, but the next year promises to be an exciting one as things are changing for the better and there are ample opportunities to be seized. 2022 can only be better than 2021.