Businesses are closing their doors and transitioning to remote workplaces, strict social isolation laws are preventing conferences and consultations, and money is dropping from the market quickly – but even so, the insurance and broking industry is yet to see the full impacts from COVID-19.
That’s according to John O’Brien (pictured), managing director at Kobe Insurance, located in Sydney’s CBD, who believes the financial fallout from the pandemic will have significant repercussions for the global insurance industry, including the potential for class actions.
“I believe this pandemic will have a major impact on the global insurance industry,” O’Brien said.
“The fact that so many SMEs will have no choice but to shut down and let go of their staff will have a massive impact on the employment practices liability space. I can also see a rise in class actions and directors and officer’s liability claims as a result of the share market dropping, and this is not an ideal outcome for the financial lines market. SMEs going out of business and the flow on affect this will have to the retail sector will impact that market also.”
O’Brien also believes other industries, including manufacturing, aviation, marine and transit, will be significantly impacted as well – which has already been observed through the temporary shutdowns of Qantas and Jetstar.
“The other concern is the manufacturing, aviation, marine and transit sectors that will be impacted. It is quite frightening to be honest as the downturn in revenue will hit everyone in different ways,” he said.
“The clients that will survive are the ones that re-invent themselves and look at ways of providing their services in a different fashion to the norm.”
O’Brien, who entered the broking sector during his marketing degree at the age of 19, says despite how significant the negative consequences of COVID-19 are, the opportunity to develop stronger relationships still exists for brokers.
“… As now more than ever, insurers need to protect their assets both from a commercial and also personal point of view. The right advice around how to structure this for the future is key,” O’Brien commented.
“So this is a great opportunity for people to get in and really build a relationship with their clients and provide trusted advice.”
However, O’Brien also admits his biggest challenge over the next six months will be keeping his clients in business and supporting them throughout this unprecedented period.
Moving away from the novel coronavirus, O’Brien says his 12-month career goal is acquiring his Australian Financial Services Licence (AFSL) that will enable him to start his own insurtech brokerage.
“I am in the final states of getting my own AFSL - once achieved this will be wonderful for me and my business partners in building our own boutique insurtech brokerage,” he said.
“I see the rise of technology and the rise of insurtech being a massive disruption to the industry as a whole. If you are not growing with technology you will be left behind, in my opinion.”
As for the competitive advantage of Kobe Insurance, O’Brien says it comes down to their insurance solutions and customer-focused service supported by technical advice.
“We are currently building some bespoke insurance solutions to ensure the client has a great customer experience where we take the pain out of the process for them,” he said.
“I believe I provide bespoke insurance solutions, with customer focused service backed with technical advice and ease of transaction.”