Opinion piece by Sharon Paterson, Chief Executive Officer, Infiniti Insurance Limited.
Most people welcomed 2020 with considerable optimism. Businesses across the world had strong revenue forecasts, supported by a trend of substantial economic growth. Then the world started to change in fundamental ways right before our eyes.
In March the Pandemic rendered all economic projections and business forecasts moot for 2020, while industries across all sectors were forced to reinvent the way business is done, leading to dramatic shifts in the landscape of the risks we face.
The dynamics around Non-Life insurance have proved to be particularly demanding, keeping the industry in constant development mode as it evolves to meet new challenges and increasingly unpredictable risks where uncertainties are prevalent.
The recent past has seen escalating pressures on the insurance industry the world over, with the number of climate-related disasters tripling in 30 years. In the last few months, we have seen major occurrences including non-climate related events such as the Beirut explosion and Covid-19 pandemic which give greater context to the dynamics and challenges at play in the industry;
Typhoon Goni, one of the most powerful storms on record, slammed into the Philippines in November displacing hundreds of thousands of people as the Philippines grappled with one of the worst Coronavirus outbreaks in Southeast Asia.
The 2020 California wildfires were particularly brutal this winter, affecting an area covering 1 764 234 hectares, killing 32 people and destroying 10 488 buildings.
The smoke cloud from the Australian summer bushfires were three-times larger than anything previously recorded – Cloud measured 1,000km across, travelled 66,000km and was on par with the ‘strongest volcanic eruptions in the past 25 years, scientists say.
On 4 August 2020, a large amount of ammonium nitrate stored at the port of the city of Beirut, the capital of Lebanon, exploded, causing at least 204 deaths, 6,500 injuries, and US$15 billion in property damage, and leaving an estimated 300,000 people homeless.
In South Africa our average annual temperatures have increased by 1.5 times more than the observed global average of 0.65°C recorded in the past 50 years. In addition, extreme rainfall events have increased in frequency. This according to The African Climate and Development Initiative.
There is no question that the industry is reeling under this burden, while it moves swiftly to address the growing hurdles, to ensure sustainability and the essential protection it gives clients.
The global Covid 19 pandemic – in essence another form of disaster with its disruption of lives, livelihoods and economies – has nevertheless also brought about some positive changes to business and our daily lives. The lockdown has demanded new ways of doing business from enhancing technology-driven efficiencies, acting as a catalyst for operational transformation, developing new business models and connecting more closely with customers. It has led to businesses becoming more competitive while prioritising marketing with the focus on retaining existing business and exploring new and diverse business opportunities.
The insurance industry must move away from a focus on analysing historical data in a paradigm shift to predictive risk assessment methods. The calamitous events have also demanded that the industry cover products that are innovated to address clients’ needs in this constantly changing environment.
“In looking at the crucial role of brokers we find those in the Infiniti ambit have positively accepted the necessity of doing business differently, especially working remotely and increasing efficiency of virtual meetings and the adoption of digital platforms.
From a personal observation, as Chief Executive Officer, I have learnt that the ethos of our company is not tied to the office and is not entirely dependent, in this age of technology, on us all working from one venue but rather on us interacting daily. We can still offer unparalleled service from wherever we are if we are prepared to put in the effort required and we have. We are successfully living our Business Continuity Plan in a way we would never have envisaged a year ago. Having said that, as CEO, I have found that I am more effective when I can more easily utilize the support that I have from my team and this I get from being together in one office. We are in the people business.
The lockdown gave as an opportunity of re-evaluating our lives. I found, like many others, how much disposable income went on non-essentials. Perhaps this change in spending behaviour will help lower the levels of household debt in the country and even result in a culture of saving?