Flexibility and humanity: The mantra for volatile insurance markets
Across all business lines, now is the time to work closely with insurance customers and brokers to find mutually beneficial solutions.
As we enter the fourth quarter of 2020, the insurance industry faces uncertainty on many fronts: Who will win the presidential election? How will this impact the economy? When will we have a vaccine for COVID-19? What does this all mean for the holidays and beyond?
This year, millions of Americans lost their jobs, and even more are now working from home and trying to juggle ever-changing personal and professional demands. The repercussions of the global pandemic will continue into 2021, and no one knows what will happen when winter and the flu season arrives.
Huge shifts in the workplace, education and every part of social life have sent shockwaves through the economy. After several months of working from home and balancing the stresses of the pandemic, what was once a drastic change is now becoming the standard way of life.
Throughout all of this, the insurance industry has been forced to adapt. Before COVID-19, the trend of price “hardening” — or the idea that prices are getting tighter with less flexibility from underwriters — was already happening. As with every business, embracing the change and creating flexible policies that fit unique situations is the way to get through and, perhaps, even emerge stronger. Particularly in the insurance industry, we’ve found that flexibility, coupled with more strategic human interactions, is the most effective approach in response to market volatility.
Finding solutions that work
At Argo, our first priority is the health and safety of our teammates. They are the foundation of our business. While insurance does involve lots of numbers, data and dollars, it ultimately is a people business. Watching out for mental health — and the very real threat of burnout — is the biggest issue in this current work-from-home environment. Many companies are thinking about going back to the office, and the truth is, there is no one solution that is right for everyone.
We are seeing a trend of decreasing commercial real estate footprints, but each employee has a unique situation that needs to be considered. Those who have kids attending school online may need to stay home. Others who have roommates and no designated workspace may be ready to get back to the office for some privacy and room to think. Some people thrive on real-life social interaction, while others may prefer video chats and the efficiency of online collaboration.
In the end, flexible policies are the best solution.
This translates into how we approach our business and underwriting. We cannot provide blanket solutions to address risks in a time of volatility and uncertainty in many sectors. Across all business lines, from property & casualty to D&O, we are working closely with our customers and brokers to find solutions that are mutually beneficial. One size does not fit all.
Adjusting our approach
As much as we may prefer business as usual, our approach has had to adjust to the times. For example, setting up policies and negotiating rate adjustments or even dealing with claims — sensitive conversations that would typically happen face to face — are now performed virtually. While we are glad technology allows us to continue working, the move to video calls has left something to be desired: the human aspect. One effort to counterbalance that at Argo is the classes conducted for our employees on how to be an empathetic and active listener, remotely and via video calls.
Larger macroeconomic questions (Will congress pass another economic stimulus package? When will a coronavirus vaccine become available?) linger and are contributing to the volatility of the insurance market. The best response is to be flexible and work closely to address the ever-changing needs of clients. Being open to offering creative solutions and maintaining a renewed focus on specialty underwriting expertise can be the way we weather this storm.
2020: Underwriting and the insurance industry
Specialty underwriting is a combination of good service, great data and knowing risks. It takes a personalized, human approach to do well. The process must be active and cooperative to find viable coverage at reasonable rates. We find that when both parties are working toward an optimal solution, they find a way to weather the tough patches and celebrate the victories. The trust built when hardships are endured together leads to resilience in both business and personal relationships.
In the insurance industry, especially during a hardening market, parties working together will work alongside each other to look at a fast-evolving risk landscape and take the time to understand their specific needs and provide tailored support. In a hardening market, where insurers are able to set profitable rates, clients who see your value will pay the necessary price.
As the saying goes, you get what you pay for. And don’t we all want peace of mind in these turbulent times? Being a true partner to your customers will pay off in the long run.
Gary Grose (ggrose@argogroupus.com) is executive vice president for Argo Group U.S., Inc. These opinions are his own.
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