When it comes to insurance in 2022, remember the people, advises Nash Omar, Hollard Insure Managing Director for Broker Markets.
While last year had many hurdles for insurers, brokers, and customers, 2022 has great possibilities. As we look to how we can successfully navigate the year ahead, we must remember a vital element in the insurance equation: people.
By that I mean all the people: our colleagues, our broker partners, suppliers and, of course, policyholders. On the face of it, insurance is about mitigating risk and improving losses but dig a little deeper, and it’s really about lives and livelihoods.
We’re very much still feeling the effects of 2020 and 2021, when our industry was hit hard several times, not least by ongoing Covid-related claims, natural catastrophes, load-shedding and the disastrous mid-year rioting and looting, which caused tens of billions of rands in damage to our economy. At Hollard Insure we’re still processing some Covid-related and riot claims but hope to conclude these soon.
As we grapple with what lies ahead – at least, what we believe lies ahead – there are several variables (in no particular order) to consider:
Reinsurance Rears Its Head
There is the hardening of reinsurance, which will ultimately lead to steep premium increases. Where reinsurance capacity will be available, we are likely to have higher premiums and less cover.
We’re already seeing this with Sasria, with a fifteen-fold premium increase of the kind that will surely impact businesses’ viability and increase the cost of living for us all.
A knock-on effect of this, of course, is that insurance will become even more of a grudge purchase than before. This impacts our income streams, affecting our sustainability, and it increases risk.
New Changes, New Risks
We’re going to grapple with changing risk exposures in a variety of areas, from weather to motor and cyber. Our world is changing at a blistering pace, and we need to keep tread with it should we want to remain sustainable and profitable.
Changing weather patterns continue to be a particular concern. Where in the past we may have had a single large-scale weather catastrophe, we’re seeing many smaller events distributed more widely. The recent record temperatures in Cape Town and the particularly wet Johannesburg summer are climate-related cases in point.
The one thing that keeps me awake at night (other than my grandchildren) is our country’s dire political and economic situation. Ongoing political uncertainty and our moribund economy are major contributors to a lack of confidence in our country’s future.
As insurers we’re resilient, and we have solutions to the immediate challenges that face us, but we have little control over the bigger picture – and that’s a huge worry.
One thing that we must do in the coming months is accept that our pre-Covid world is gone forever. The sooner we do that, the better for us all. New normal has quickly become a hackneyed phrase, but we’re no longer in it: this is the normal now.
Central to this acceptance is people, and pivotal to us living and working successfully this year is how we work with them. I think it’s fair to state that even the best strategy is dead in the water without engaged, happy employees and a strong corporate culture.
Part of this challenge, for companies such as Hollard Insure, is how to combine working from home and returning to the workplace. As we work out how to manage and live with Covid-19 like we do with other viruses, such as influenza and HIV, we’re seeing more and more people returning to their formal workplaces.
Some of us are very happy to continue working from home but others are glad to return to the office. Figuring out a balance that’s sustainable over time, while still preserving and promoting your company’s energy and culture, is not an easy task.
But this is about more than just where our workstations are located and what our corporate colours are; it’s also about our individual health and well-being. If it did nothing else for humanity, the coronavirus has made us pause and seriously contemplate how we want to live our lives.
This led last year to the so-called Great Resignation (also called the Extraordinary Exodus or the Big Quit), in which record numbers of people in economies the world over left their jobs. In the US, for example, the percentage of people resigning their jobs was triple the traditional high of 2.4% of the workforce.
This phenomenon bucked previous trends, in which people were more likely to hang on to their jobs in times of economic uncertainty and resign and find something else in good times. A commonly touted principal reason (there are a few others) is that the Covid-19 pandemic made us think about our working conditions, our careers and our long-term goals.
The bottom line is that to remain resilient and sustainable, companies have to break out of the “old normal” paradigm and find new ways of managing their people effectively. At Hollard Insure we’re conscience about how we can adapt our fantastic work culture to the times and circumstances, which makes sense: the more we can continue to be the Hollard that our broker partners and customers have come to love, the better for all of us – and the more likely that we will achieve our goal of becoming South Africa’s favourite insurer.
In the future, all of us will likely face similar challenges around the business environment, the role of technology and IT, stricter policy wordings, how we prepare for future catastrophes, succession planning and more. There will be many priorities to consider, but we shouldn’t try to do them all at the same time: the most pressing ones must be addressed first, and then the next-most urgent, and so on.
Above all, we should remember the human aspect in everything we do. To keep our employees on board, our customers loyal and our partners happy, we need to remember that their world and their needs have changed – ranging from a tougher insurance regime to a great desire for a better work-life balance.
Those businesses that can adapt to the times yet retain their organisational culture, that can put themselves out there with the right team and the right energy levels for our current circumstances, are the ones that will find opportunities and succeed in 2022.