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Insurers and brokers face up to regulatory challenges

Insurers and brokers face up to regulatory challenges

Insurers and brokers face up to regulatory challenges Lloyd’s of London underwriter Hiscox enjoyed a solid 2016 as it bucked the trend across the industry and enjoyed significant gross written premium growth even in spite of the low rate environment (see article). Now with sights set firmly on the New Year, the company is keen to work hand in hand with brokers to face the challenges ahead.

“We want to help our brokers grow and be successful, be that by engaging on new schemes opportunities, working on larger open market cases or by helping to streamline processes,” explained Derrick Potton, Hiscox UK and Ireland sales director in an interview with Insurance Business. “Each broker will want different things from Hiscox and as we only trade with a relatively small number of brokers we always aim to offer a bespoke approach.”

Describing 2016 as a “good year despite the current competitive marketplace”, Potton pinpointed regulatory challenges as one of the key factors influencing the insurance business going forward – and one that brokers and insurers must work closely together on.

Regulatory changes can be challenging for both insurers and brokers,” he said. “An example of this is in our schemes business, where we often delegate authority to brokers but where we still have a legal obligation to ensure delegated authorities are fully compliant. Throughout 2016 we have been working with our binder brokers to ensure that all of the regulatory requirements are being met, documented and evidenced.”

With talks turning to emerging areas of business, Potton admits that the importance of cyber and data insurance is only likely to grow in the year ahead – but that education will be key for brokers to make the most of the opportunity.

“The cyber insurance market can be a minefield for brokers as not all products offer the same level of cover,” he noted.

There are problems too in addressing low premium business –though in this regard plenty of help is at hand.

“Low premium business is still inefficient for brokers to process,” explained Potton. “We work with brokers to help them with this, for example by building quote and buy websites with a full online journey to deal with schemes or affinity business. We can also use pre-priced proposal forms to speed up the transaction and ease of binding cover. In Colchester we have a team of schemes analysts and project managers who work with our brokers on a bespoke basis to help drive more efficiency for both them and us, as the insurer.”

Going forward Potton believes that investments in IT platforms will be necessary and that brokers and insurers alike should look to improve efficiencies hand in hand while looking for opportunities to add value – in doing so, a highly successful year awaits.

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