Ashwin Mistry details the key challenges facing insurance brokers during the pandemic

"We're not over this crisis by a long shot"

Ashwin Mistry details the key challenges facing insurance brokers during the pandemic

Broker focus

By Mia Wallace

If there is one thing that the COVID-19 pandemic has highlighted, it is that resourceful people and organisations can find a silver lining in the challenges presented by a crisis. From virtual events to charitable projects to e-learning initiatives, new solutions are being presented every day. For Ashwin Mistry (pictured above), the executive chairman of BHIB Insurance Brokers and executive chairman and co-founder of Brokerbility Ltd, this has been a time to learn a broad variety of new skills as he explores the key challenges currently facing brokers.

Mistry, who will be a featured speaker at Insurance Business’s upcoming Broker Connect virtual event, noted that such initiatives are essential metrics of what insurance brokers value. It’s a question of priorities, he said. Those brokers who think that the pandemic is simply somebody’s else problem will not be as likely to get involved with such events while those who see the existential threat that this is to the insurance sector are more likely to get involved with industry learning opportunities.

“I think the more information people have to absorb and to consider, the better the place they are going to be in,” he said. “I’ve always been very happy to share my ideas with a host of people, and I want to learn from other people’s opinions as well. And if that helps me shape some of my thinking and decision-making then why would I deflect from participating?”

The pandemic has highlighted the need for excellent communication channels and Mistry, who has been catching up with Brokerbility’s network brokers on a one-to-one basis, has found these discussions incredibly insightful. Brokers need to talk to each other, and this has been a great opportunity for them to express their concerns and to catch up about what is happening within the market and their own businesses.

In a previous interview Mistry stated that, while the top 10 challenges facing insurance brokers may change in ranking of importance, the list of concerns itself does not alter. This has held true throughout the pandemic as, though the pressing nature of certain challenges has changed, this list remains the same. The big issue for brokers now is the problems involving business interruption claims in the market and insurer’s behaviour.

“A real concern is how the national media, not the insurance media, is reacting to all these potential class action groups,” he said. “This is one of our biggest issues because, obviously, pandemics were never meant to be covered and now brokers are effectively having to defend the indefensible.”

Between 9/11 and the financial crisis of 2007/2008, and the annual losses relating to flooding, Mistry’s 40-plus year career in the insurance sector has seen several major catastrophes but none of these have had quite the same impact as this pandemic. He believes that the insurance sector has reacted in a very human way to the crisis and that insurance companies have done what they can in the face of this unprecedented situation.

Going forward there are several lessons that brokers should learn, Mistry said, and key among these is to expect the unexpected. Businesses should also understand that there has been a gravitational pull within the sector to the lowest common denominator of premium and the widest cover.

“I think that luxury is now gone, and I think that rates will begin to harden in certain areas,” he said. “And I hope insurers don’t use this as an excuse just to pass off hard rates and higher premiums, because they should recognise the significant drop in the volume of claims in the motor sector in particular, but also the home insurance sector and other areas. [Insurers] should be using that funding to compensate for other areas of the business.”

Mistry noted that, while insurers should not be trigger happy about putting rates up, brokers must also be using this time to prepare their businesses to make sure they are talking to customers on a much more regular basis. There are so many more issues that are going to come out when the crisis is over and the brokers who handle the policies of their clients will need to be aware of which elements of exposure may open next. This is already being noticed in the care sector where liability are beginning to harden due to the lack of PPE equipment and employers’ and public liability claims in that sector will likely be the next push.

“We’re not over this crisis by a long shot, especially as nobody knows whether there is going to be a second wave,” Mistry said. “Anything you say could be old news in 24 hours, let alone next week. And so you’ve just got to guide your policies the best way you can, and still be there for your customers in their hour of need. This pandemic is one but, of course, there are other elements of risk such as cyber, D&O, material damage, flood and theft that are still around. They are not going to go away, and those clients who are exposed to these issues still need assistance and brokers should be available for that.”

To learn more from Ashwin Mistry, you can register for Insurance Business’s free Broker Connect event at this link.

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