Throughout this week, we’ll be taking a closer look at the benefits of premium finance and the role it plays. Our CEO Sharon Bishop has started by discussing the optimism of brokers and their future opportunities.
Read the full blog below.
A warm welcome all Insurance Age readers to Premium Finance Week, in association with Insurance Age. Throughout this week we’ll be taking a closer look at premium finance and how it is an integral part of a broker’s client proposition, especially in light of the pandemic.
The long shadow cast over our industry by Covid-19 has turned the business outlook on its head. At the start of the year, brokers were bullish about growth prospects in 2020. Our broker survey in February found 90% saying they would experience business growth, with 43% predicting double digit growth. That optimism has been shattered, at least for the time being, as more important priorities come to the fore.
In his own take on the nature of a crisis, President John F Kennedy noted: “The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger, but recognise the opportunity.”
The lockdown has seen our industry react quickly to the impact on jobs and cashflow for our brokers and their customers. The measured way in which many brokers implemented their own business continuity plans and acted to help worried customers has been impressive. We also worked quickly with our broker partners to implement forbearance measures for commercial and personal lines customers allowing them to stay on cover during a time when they were facing financial difficulty.
Brokers are at their heart entrepreneurs, and while Covid-19 has been unexpected, it isn’t surprising that they have rolled their sleeves up. With new operating models activated, and many employees now working from home for the foreseeable future, it is worth thinking about the implications of such huge changes in working practices.
For example, new technology that has enabled remote working means that we may not need or be able to count on traditional call centre operations in future. Many of our own colleagues at Close Brothers Premium Finance (CBPF) were provided with laptops and, having ensured data security, were able to continue to do business from their homes.
Face to face meetings have been replaced by video and telephone conference, removing the need to travel and having the added benefit of cutting carbon emissions. How many people have noticed that technology-enabled meetings tend to be less chit chat, and more action-orientated? Covid-19 may yet play a role in bringing about the demise of the boring meeting.
My own experience leading 400 people remotely has confirmed my sense that, for all the benefits of technology, our people and their welfare must come first. The lockdown has threatened our wellbeing and mental health has suffered as a result.
At CBPF we have paid attention to all our colleagues from the start of the lockdown, and in talking to many broking partners, I’m pleased that this is a common theme. There will be a dividend for broking bosses who have invested in their people, and made them feel valued and nurtured. It doesn’t just make you feel better, it makes for higher performing teams. It shouldn’t take a pandemic to make employee health and well-being a priority.
Delivering growth is what broking is all about, and in our February survey, brokers were asked to list the key areas where they thought growth would come from. 85% of brokers said growth would come from winning new clients, 62% said through premium increases and 25% through additional services. It is clear that Covid-19 has dramatically changed these numbers, but once the current crisis has subsided, the economy will kick into life again, and I remain optimistic that the sector has a bright future.
There will surely be many opportunities to embrace and take advantage of the new normal after the pandemic is over. Although it is natural to feel some trepidation about the next phase, as there is still great uncertainty, forward thinking brokers must be identifying what those additional sources of revenue are and seize them, or risk missing the chance to capitalise after we have hopefully emerged from the tunnel towards the latter part of this year.
Thank you, and I hope you enjoy reading, discussing, and debating premium finance and a number of other topics and themes we look at during this week.