Scott Eason looks back on another Solvency II driven year and wonders if 2017 will be different.
Start with why
I was reminded before Christmas of the famous management book, Start with Why by Simon Sinek. For those who have not read the book, Sinek claims (fairly repetitively) that the best companies are those that have a clear ’why‘ to their being and have management who can clearly articulate this while also creating a culture to support their raison d’etre.
"Even though Solvency II came into force on 1 January 2016, last year was still dominated for most insurers by Solvency II developments, preparation and applications."
This started me thinking about the current state of the insurance market. Even though Solvency II came into force on 1 January 2016, last year was still dominated for most insurers by Solvency II developments, preparation and applications. We are still not yet out of this period and the new live reporting season coming up is likely to be painful as well as a learning curve for many.
If you add to this that we then have to improve processes and shorten timescales for next year, you could be forgiven for thinking that the ’why‘ is “to maintain a stable solvency ratio”.
Doing better for your customers
Many may think that the ’why‘ for insurers is to provide funds in times of need, whether that is to compensate for a loss or to provide a financial safety net if circumstances change for a policyholder. However, this is more appropriately labelled the 'what' and is the case for all insurers; the real ’why‘ is the way in which they are able to do better for their customers than anybody else.
This could be due to cost efficiencies, better knowledge of their customers, innovations including investment strategy and technology (although these are difficult to maintain) or better customer and adviser journeys.
We saw a lot of consolidation pre-Solvency II. I believe that we will continue to see further consolidation as only those who have and can maintain a real competitive advantage in one or more area, and can achieve hurdle levels in all others, will survive.
I also turned the mirror on us here at Barnett Waddingham. We have a passion to help insurers to either take the lead in specific areas or to achieve required levels in others in order for them to thrive.
What is our 'why'?
We can deliver cost-effective solutions for providing actuarial, risk, investment and data analytic functions or provide advice and support to in-house teams. Our ‘why’ is the quality of our people, their knowledge and their focus on always putting our clients first.
We're proud that 100% of our clients surveyed in 2016 rated our service as good or excellent (see link) and look forward to working together in 2017 to achieve our common goals.