This week we look for opportunities in the home office sector, note the value of matching ADAS features to driver risk and look at what effect the COP26 commitments will have on the insurance sector.
START: COP26
LIIBA issued a statement this week as COP26 got underway. The transition to Net Zero is a target that every government in the UK, EU and beyond is keen to achieve, so there will be regulatory back-up on these aims as well. For brokers, the opportunity is offering advice on things like de-carbonisation of a company, says LIIBA, who are keen to get busy.
Oil and gas to follow coal?
The big insurers have already moved away from insuring things like new coal mines. As COP26 pledges to end coal usage in over 40 countries, the activist pressure will shift to oil and gas. For brokers, the downside of all this could be that insuring fuel storage, tanker distribution, gas boiler installation etc becomes a more challenging proposition – time will tell.
Compliance and Standards
To achieve Net Zero there has to be a universally accepted set of standards on things like company reporting and the IFRS are already well advanced with this matter.
News this week that an International Sustainability Standards Board is to be established will save brokers, MGAs and insurers time and money trying to figure out exactly what the value of different carbon off-setting schemes might be for example. That level of clarity is essential for the industry.
Green investment becomes mandatory
The other big trend emerging from COP26 is one of stricter controls on investments by insurers. Largely this affects the pension fund cash being invested, but eventually, this could filter down to MGA and broker level. The agreement this week at COP26 from banks and insurers to pledge billions in sustainable investment pools shows which way the wind is blowing. The rules will be all about making sustainability the very heart of the investment, in other words, is it socially good, not can you make money from it?
RUN: ADAS COULD PREVENT FENDER-BENDER CLAIMS
Think about it. Those automated braking systems, where objects in front and behind are detected via sensors and then the brakes are applied to avoid impact, could save insurers and brokers big time.
Admiral agrees, which is why they’ve bought into the LexisNexis ADAS database, which tracks the safety features of each car, of which there are 100s of variations. Knowing the driver’s poor navigational skills in an Asda car park can be overcome via technology is a bonus. And it can protect No Claims Bonuses too.
GROW: HOME OFFICE RISKS
A news item this week from Ageas, who note that laptops and tablets took some damage from spilt milk, water damage and rogue pets during lockdown. What started as three weeks to flatten the curve has morphed into a hybrid work model, where many people rarely leave their houses.
For brokers, there is a huge opportunity in covering home offices, conversions of outbuildings, data protection both paper records and online, business interruption, plus high-value items like Apple Macs, digital camera studio set-ups and more.
Interesting times ahead.
