The importance of close business and personal relationships between insurance brokers and their insurer partners cannot be underestimated. It is often the difference between either achieving desirable results for clients or leaving them with insufficient, expensive and undesirable risk transfer solutions.
Many industries started downplaying the importance of face-to-face interaction and personal relationships some time ago, however, the consequences of COVID-19 in terms of the hardening market and the increase in home working shows us that the need to develop and manage good relationships remains as crucial as ever.
Technology has gradually been introduced into the Financial Institutions market alongside facilities designed to allow fewer employees to place a larger volume of business. This has resulted in many of these facilities no longer being considered viable by insurers, leading to their non-renewal and the abandonment of those insureds who purchased their insurance through them.
While Lockton has certainly embraced the advantages of technology to streamline the client experience and make life easier and simpler for them, we have always viewed our relationships with insurer partners as more essential than using facilities to lighten our workload. This philosophy towards client service is a key differentiator of the Lockton model.
Navigating the economic crisis
Capacity was being squeezed and the market was hardening even before COVID-19, but this has now been compounded by what is possibly the worst economic crisis of the modern era. Fortunately, we have been able to use the relationships we have spent years cultivating to ensure we can still negotiate high quality risk transfer contracts for our clients.
We are able to minimise the impact of the current FI market conditions and continue doing great work for our clients because of the trust and goodwill we have built with our insurer partners. Dealing with someone you trust and with whom you have developed a professional and personal relationship is crucial in an environment where most people are working from home and when it is almost impossible to negotiate terms face to face. Insurers and brokers alike tend to prefer looking into the whites of the eyes because so much of what we negotiate is based on a certain level of trust that the risk will be represented correctly and that the insurer's intent with regard to their terms and conditions are suitable for the insured.
The years of relationship management with our insurer partners has meant the challenges posed by working from home have not had the impact on our negotiations that some feared at the beginning of this crisis. Indeed, despite the fact that we are now in the throes of the most severe market correction in insurance for 20 years – and one which could prove to be the most severe in living memory – we have still been able to deliver optimal client results.
That's not to say every renewal is easy and we always get our own way, but our exceptional working relationships with our insurer partners have allowed us to ensure clients still have appropriate and robust risk transfer contracts in place and that these are being delivered at the most competitive premiums available in the market.