Ahead of the republication of the Insurance Market Report, I spoke with Axco's researcher about market trends and challenges and Brexit implications.
WHAT MARKET TRENDS DO YOU FORESEE?
Many observers in the Czech Republic were dismayed at the impact of recent EU initiatives such as the General Data Protection Regulation and the Insurance Distribution Directive (IDD), both of which have added to the sheaves of unread paper that brokers are forced to impose on their clients. The IDD, in particular, is said to have made it impossible for smaller brokers to survive without joining “cluster groups” to manage their regulatory compliance. The IDD’s qualification requirements are also expected to act as a further disincentive for university leavers to consider a career in insurance broking.
HOW IS THE UK’S APPROACHING WITHDRAWAL FROM THE EUROPEAN UNION VIEWED?
Most insurers and brokers were still taking a “wait and see” attitude to the approach of Brexit on 29 March, though at least two major European insurance groups were said to have cancelled all UK-domiciled security off their reinsurance programmes because of contract continuity fears. Some international brokers were also taking advantage of Brexit uncertainties to take business out of the hands of their London placement teams and place it directly themselves in EU markets. Barcelona, for example, is said to be developing strongly as an alternative finpro hub.
WHAT ARE THE MAIN CHALLENGES FACING THE INDUSTRY?
Czech insurers have made very little progress in adapting to the digital world. One interesting perception is that young people have so little basic knowledge of insurance that they need the guidance of an old-fashioned face-to-face insurance agent even more than their parents did: in other words, it doesn’t matter how “sexy” an insurance company’s app is if you don’t know what insurance is or why you should have some. Lack of financial literacy among the young seems to be a problem right across the developed world, which is not only holding back insurance sales but also contributing to a global recruitment crisis in the industry.
WHAT WOULD YOU RECOMMEND READERS DO IF THEY VISIT PRAGUE?
The city is renowned for its architecture and its excellent restaurants and breweries. A special highlight this particular trip was a night at the ballet: a new production called “Valmont” based on the plot of “Les Liaisons Dangereuses”. Unlike audiences in London, the Czechs still believe in dressing up for a night out, which complemented the beauty of the 18th-century Estates Theatre.
One interesting perception is that young people have so little basic knowledge of insurance that they need the guidance of an old-fashioned face-to-face insurance agent even more than their parents did: in other words, it doesn’t matter how “sexy” an insurance company’s app is if you don’t know what insurance is or why you should have some.