August may well have been the lull before the storm for the insurance industry.
Traditionally the month of August is the time when the market takes a breath before the work on the lead up to the vital 1 January reinsurance renewals which will define the market for 2024 and often beyond.
However, in the UK August saw the renewal, of a key agreement for the country’s older residents.
Originally agreed in 2012 the Agreement on Age and Insurance between the Government, the British Insurance Brokers’ Association (BIBA) and the Association of British Insurers (ABI) was renewed. This ‘Signposting Agreement’ continues to help older people find the essential travel or car cover they need.
Since the agreement was signed BIBA has received 1 million enquiries about car and travel insurance from older people via its Find Insurance Service.
The Agreement means that if an insurer or insurance broker is unable to offer cover to an older motorist or traveller because of their age, they will refer the customer to a provider who can meet their needs, or to a dedicated signposting service such as the Find-Insurance Service operated by BIBA.
Graeme Trudgill, Chief Executive at BIBA said: “This Agreement is a great example of the industry working together for the good of customers. BIBA is delighted to continue with it in conjunction with Government and the ABI following eleven successful years. It is increasingly important as our population ages and the number of older people travelling overseas has increased rapidly post-COVID, that people get all the support they need to find the right insurance protection. Signposting helps this happen.”
His views were backed by Hannah Gurga, ABI Director General.
“Our industry wants all customers to be able to access competitively priced insurance that provides vital peace of mind, and this initiative is helping to deliver that,” she explained. “It’s good to see the Agreement renewed between the Government, BIBA and ourselves and the positive impact it’s had in helping many older customers to continue to be covered for driving and travelling.”
Andrew Griffith MP, Economic Secretary to the Treasury commented: “We all need insurance to continue doing the things we love – whether that’s travelling to see the world or driving to see friends and family. That’s why it’s so important that tools like the Age Agreement are in place to help find older customers appropriate cover”.
The industry has also been hit by another powerful reminder of the threat posed by climate change with the arrival of hurricane Idalia which hit the state of Florida.
Experts at modelling firm Verisk has estimated that insurance industry losses from recent hurricane will total between $2.5 billion and $4 billion.
The losses include estimates around wind damage, storm surge across Idalia’s track but added it anticipates that the majority of the losses will be from damage due to wind.
The industry loss estimate from Verisk includes onshore residential, commercial and industrial property losses, as well as automobile losses, across building, contents and time element coverage.
It also factors in the impact of demand surge to its loss estimate for hurricane Idalia.
It is likely to see reinsurers revisit their strategies around the coverage of major natural events, following last year’s withdrawal of capacity for some extreme events.
However, delegates who arrive at the Reinsurance Rendezvous in Monaco this month will also have the looming question of cyber coverage on their minds.
At present some 50% of the capacity for cyber insurance is provided by reinsurers via quota share agreements but there is talk that reinsurers may well be looking to insurers to take more of the risks given they have the final decisions on those risk they choose to underwrite.
Whether this will see reinsurers looking to attach their capacity at a higher level in order to sharpen the minds of the primary markets it yet to be seen but the view is that the demand for cover from clients will only increase and the industry need to define its strategy to meet those demands.
The decisions make in Monte Carlo will have a profound impact on insurers as they look to obtain reinsurance coverage for their risk portfolios and a failure to access sufficient reinsurance will force insurers to rethink their appetites.