Dealing with the unexpected

Antoinette Shand, Partnerships Executive, Lombard Insurance

I addressed a forum of brokers recently as a prelude to a webinar by Clem Sunter (a well-known South African futurologist). He spoke about scenario planning by summarising chapters from his latest book, and how it is so important to regularly look towards our future and adapt as we go. Two things struck me as poignant for 2021; 1) spend as much time breaking your strategy as setting it and 2) only focus on the things that you can control.

Our industry is built on risk, and whilst there is a certain element of prevention and management, part of why we exist is that our policyholders rely on us to be there when things happen out of their control. No one can predict the future with certainty, and haven’t the past two years been a reminder of that?

We can’t ignore that there may be more to come with a once unimaginable prospect of an Eskom grid failure or significant water provision and quality issues. Our businesses have been born and bred in an unstable environment and whilst it is understandable to react by being more risk averse – every risk has a price and with technology advancements, risks can be understood and managed better.

Whilst many have suffered and were unable to recuperate, the past year has shown us that businesses (and more importantly, the people and communities behind them) are resilient. Our trade credit insurance team visited Durban after the riots and was so encouraged by the South African spirit of community and entrepreneurship as they held together to protect and resurrect what was lost. This same team faced the prospect of losing their own business, and whilst many difficult decisions had to be made, they have been able to digitise at a speed and in areas that otherwise might never have happened. Another take out from Clem Sunter resonates – “Emotion propels us into action”.

From PUSH to PULL

What can you expect from us in 2022? The focus in the industry for some time has been on the shift from risk transfer to risk management – nothing new here, but so many more players in the value chain are making this a reality.

We are exploring industries and taking a holistic approach to risk management by looking at what can be done to prevent and mitigate risks, and working with our brokers on what other services and offerings would make our policyholders’ lives easier, leveraging IoT, digital solutions, AI, etc. The shift is from PUSHing insurance products to PULLing policyholder wants and needs and creating a solution where the residual risk is absorbed by an insurance product.

We’re also pursuing algorithmic underwriting and there’s still a raft of work required to ensure we have reliable data. The opportunity for underwriters is to transform their role to be less about the process, and more about thinking and relationships. Whilst there is a slower shift in the more complex risk areas, our partnership with Explore.ai has resulted in exciting advancements in this space.

Being there vs. Seeing there

I don’t remember where I heard this term first (it isn’t mine), but I really like it! We firmly believe that magic happens organically and in-person and less often on scheduled Zoom calls. We support flexible working and being productive in the way that works for our employees, but equally, we want people in the office a few days a week to make magic. Being together enables our culture and values, it is a large part of who we are.

There are many studies that prove trust is more easily built in person and probably more importantly, it’s not the same as having a digital glass of wine together. We are enjoying industry events again and get-togethers with our broker network and have many more planned for next year (fourth wave depending).

So, cheers to resilience, making PULL solutions a reality, and collectively propelling ourselves as an industry to make magic in 2022.