Concerns have arisen around the efficacy of insurance contracts, and the COVID-19 pandemic has highlighted the gaps in "understanding and expectation" between customers and their insurers, according to Barclays' managing director of group insurance, Mr Farhad Jamooji, in an interview which is part of Aon's Virtual Reinsurance Renewal Season fireside chats.
Hosted by Mr Dominic Christian, global chairman of Aon’s Reinsurance Solutions, Mr Jamooji highlighted that some customers were demanding a different approach to insurance protection.
“The basis of insurance seems to be very much causation-driven and what I think you are hearing increasingly from customers, whether they’re individuals, SMEs, large corporates, is they want to be more outcome-driven. It’s a giant step, but I think that’s the kind of thought process that would be helpful as we think about how we can actually make our lives much more relevant to each other.”
He said that the insurance industry should better promote and demonstrate its role in society.
Banking and insurance
He said that the banking and insurance industries each had a “richness” of data that could be utilised as “a way of beginning to forecast certain aspects of risks,” as well as helping to better evaluate “the speed of risk evolution”.
He added that banks and insurers working together could help customers to become “as resilient as they can”.
“Ensuring that [businesses] have access to good risk management and insurance protection, if that helps those businesses then ultimately, as a firm advancing funds, if they are more resilient it actually makes our business more resilient.”
In terms of Barclays’ own risk profile, Jamooji noted that in recent years the bank’s physical asset base had shifted more towards an intellectual one and that it had developed an effective internal stakeholder engagement process to identify evolving risks within the organisation.
He also said, “One of the lessons that the banks had to learn or suddenly wake-up to was that they’re a commercial organization, but they have a role in society, and they have a purpose, and they provide a function. And that message can get lost. I think if the insurance industry recognises that it’s here to help to promote and protect society, that would be a really good and powerful mindset to demonstrate.”
The goal of Aon’s fireside chats is to drive growth across the re/insurance industry in order to bring capital closer to clients’ needs and enable them to flourish in a stronger economy. The series discusses the challenges and opportunities facing major re/insurers and insurance buyers, sharing both perspectives.