Covid-19 ‘will lead to big changes in the way we work’: Liiba CEO
In the long term, far fewer people will need to work in EC3, Chris Croft tells Insurance Day
The Covid-19 crisis is likely to lead to “a very significant” long-term change in the way the London market does business, the chief executive of the London & International Insurance Brokers’ Association (Liiba), Chris Croft, has warned.
The pandemic has forced the vast majority of London market employees to work from home and seen a sharp increase in the use of e-placement technologies such as PPL.
Croft told Insurance Day that many of these changes would persist after the crisis.
“The idea of just going back to the old ways of working and having lots of people in very expensive offices I don’t see happening," he said.
“Our investment of money and endless encouragement of members to sign up to the various electronic trading platforms has really borne fruit. They’ve stood up excellently. Much larger volumes have been traded electronically and it’s worked."
C-level executives have told Insurance Day that, broadly speaking, their businesses have adapted very well to working from home and have been able to carry on trading.
Successes such as these, Croft said, mean there are likely to be “fewer people of all kinds” working in offices after the end of all Covid-19-related restrictions.
The government has unveiled updated guidance urging people to work from home if it is possible to do so, although workers in some industries, such as construction and engineering, are being encouraged to return to work now if safety measures are in place.
It is hoped this loosening of rules will continue over the coming months, allowing more workplaces, as well as schools, to reopen.
“The idea of just going back to the old ways of working and having lots of people in very expensive offices I don’t see happening”For insurers, the direct impact of Covid-19 is likely to be limited thanks to widespread pandemic exclusions.
Chris Croft
Liiba
Willis Towers Watson has estimated total Covid-19-related losses at up to $80bn for US and UK insurers (including the London market). This would be in line with a very large natural disaster.
Losses are expected in US and UK business interruption, contingency, US directors’ and officers’, US employment practices and US general liability, US mortgage, trade credit and surety and US workers’ compensation.
There have been disputes, however, as to the true scale of business interruption coverage within existing policies. The Financial Conduct Authority (FCA) has unveiled plans to bring key relevant cases to court to bring clarity to specific policy clauses and wordings.
The idea is to create certainty in “grey areas” of contracts where insurers and insureds disagree.
Croft pointed out the FCA’s intervention will not resolve all Covid-19-related contractual disputes because the test cases will focus on the domestic UK small and medium-sized enterprise market.
“We have international business that will have an element of business interruption coverage,” Croft said. “It’s unclear whether a UK court judgment would add clarity around those policies, especially if they’re written in multiple centres.”