Insurance’s raison d’être is to provide a product that enables customers to survive crises. You might therefore assume the industry’s chief executives would be well suited to functioning in a crisis.
And yet the 2020 coronavirus pandemic has been an unprecedented challenge. CEOs have had to take tough decisions amid a sudden switch to remote working, while the industry has faced a public relations storm from business interruption claims disputes.
Remote working has perhaps been the most obvious challenge presented by the pandemic. Senior management sceptics have been compelled to reluctantly embrace flexible ways of working that they may have opposed in more normal circumstances.
“Some CEOs have been pleasantly surprised by how effectively people have been working remotely,” says Mark Stephens, a partner and executive search consultant at Stephens Rickard.
“It’s cut out the commute and it’s helped people who preferred to work part time or work flexibly, and the rest of the world now understands they are contributing; remote working productively is entirely possible.”
Technology has worked well for a traditionally technophobic market. “It has been incredibly resilient through the crisis days when everybody was hunkering down and wondering what's going to happen to the trading environment,” says George Davies, senior client partner at management consulting firm Korn Ferry.
On the other hand, communicating online has made some negotiations harder. One source notes some Lloyd’s brokers admit it is harder to lean on underwriters to gain a sweeter deal placing business via a video call rather than face to face.
Remote revolution
Many predict the embrace of remote working after the pandemic. “We will definitely see more flexible and remote working than before Covid-19,” says Natasha Gill Pajarola, managing director and head of human resources for reinsurance at Swiss Re.
Workforce planning is a focus as the immediate crisis recedes, according to Korn Ferry’s Davies, with employees grouped by those who need to be office based, those who can work from home, and a great many others that can do either or both.
“There is this huge ‘hybrid group’ of people in the middle,” he says. “For them, workforce planning might mean working two days a week in the office and three days at home.”
Building esprit de corps and sharing knowledge among colleagues is trickier when relying on Zoom or Teams calls, which might limit remote working in the longer term.
“We’re all social mammals, we need human interaction, and it’s not great for mental health,” says Stephens.
He worries some leaders will get the balance wrong. “Companies seeing this as an opportunity to focus on real estate savings are being incredibly shortsighted because no one will want to work for them,” he says.
“If you’re a 25-year-old in a shared flat, and there's only one communal room aside from the kitchen, remote working isn’t ideal. You need to give people choice.”
Flexible working will lead to many more temporary roles, according to Davies, posing questions of how to monitor performance and to restructure the workforce to be operationally efficient.
“Things will move more to the Californian virtual way of how we monitor a hybrid workforce,” he says. “Outcomes-orientated performance will come to the fore to ensure that individuals are clear on their goals and how they are monitored and rewarded.”
Inclusive environment
A shift in leadership skills was already occurring before 2020, towards empathy and communication, linked to high-level trends such as diversity and inclusion, and corporate social responsibility.
“The intertwined challenges arising from the Covid-19 pandemic and Black Lives Matter movement have caused the globe to wake up and think more deeply about challenges in the organisations we work for and the wider society we live in,” says Paul Little, chief operating officer of (re)insurance broker Protecdiv.
“It is essential that leaders show patience and empathy by supporting staff with mental health services and providing forums for employees to acknowledge and process what has happened and give direction of how the company’s policies or strategies might change,” adds Little.
“Decisive action is needed to set a new course for the company whether it’s adjusting to the operating model, for example to work from home, or to adopt new corporate policies to address any inequities in a company’s business practices.”
Communication breakdown
While the industry seems to have done a good job at internal communications, it has fared badly at public relations, according to Mairi Mallon, co-founder and chief executive of PR firm Rein4ce.
“Being a good communicator is a given for an executive,” she says. “But the industry as a whole is not as good as it should be at communicating with the outside world.
“The insurance and reinsurance market has a reputational issue. Instead of promoting the great work we do in keeping the world turning after terrible events, as an industry we tend to ignore communication with the wider public.”
Rather than viewing communications as a central tenet, it is usually seen as a cost, and often an afterthought, she says, with media interaction largely limited to the trade press.
“I know of only one listed company that has a communications expert on the board,” Mallon adds.
She thinks the sector has not yet faced up to the terrible press it has received in mainstream media over coronavirus-related claims.
“Standing from outside, it looks like a car crash,” says Mallon. “The rhetoric inside the market, however, is that the claims were not valid, and therefore should not be paid. There is a massive disconnect when it comes to communicating and understanding each other.”
