With the Insurance Act due to go live on August 12, attention will be turning away from the theory to what is actually happening in practice. Airmic chair Clive Clarke also chairs the Insurance Steering Group, and has followed developments closely. Here he shares his thoughts with Mark Baylis – and appeals to members to share their experiences with him personally.
Mark Baylis: Do you see the Insurance Act as a once-in-a-lifetime opportunity for buyers, and how ready are members to seize that opportunity?
Clive Clarke: It took 109 years to get a new Act! So it does present buyers with a unique opportunity. Each member has or will very soon be assessing how they can comply and take advantage of within their own businesses. It's a fantastic chance to seize the moment and for buyers to collectively raise the bar of the risk and insurance profession.
MB: With the Act nearly upon us, do you agree with the comments made during the conference Leadership Forum that the market is not yet fully prepared? And in what ways?
CC: The market is just that, and you will always get a natural variance from the participants within it. While that may be somewhat frustrating for the buyer it gives it the uniqueness we treasure. My experience suggests the whole market has done work, and in some cases quite detailed, but perhaps with different interpretations than had been expected. Buyers are seeking to be 'Act ready' even if their renewal was prior to it becoming effective. Some brokers and insurers hadn't anticipated that that would be the case and were still picking their way through the detail.
MB: What areas have the most potential to unsettle insurance buyers?
CC: The annual renewal process on large complex multinationals buying multiple lines with multiple insurers has always given buyers concern about how they can be sure to have gathered all the material data and facts to represent the risk accurately. Innocent non-disclosure clauses and other policy constructions give some protection but the risk remains. The Act requires buyers to make the process even more collaborative, and I say the ‘more’ with emphasis.
MB: It has been suggested that uncertainties over such questions as fair presentation could give lawyers a field day. Do you agree, and what can members do to protect themselves and their organisations?
CC: Parties will have differing opinions, and we have a legal system to deal with this - in the main quite effectively. Members will need to make themselves conversant with their obligations, and Airmic and others have produced excellent guides to help in this regard. Members should also not be afraid to contact me, the secretariat (via the website) or their peer networks to exchange views and experiences. The broking community also have a crucial role to play by giving their customers clear and concise guidance.
MB: How long do you think it will be before we learn how the legislation is working in practice?
CC: I think news and feedback will be filtering through imminently, even before the Act becomes law, following the traditionally busy 1 July renewal period. Many insurers themselves will have placed their own reinsurance treaties so will have experienced the Act from both sides. Stories of the good and bad elements will naturally flow around the market but 1/1 renewals, when the Act is actually live, will be another interesting time.
MB: What measures do you see Airmic taking to obtain feedback to members in relation to the Act and to give them ongoing support?
Airmic prides itself that on behalf of our members we will assist, train, educate and inform. The implementation guide produced in Sep 2015 was only the beginning of Airmic's focus. There have been a series of workshops and the Act was heavily featured at the conference, where we published a voluntary clause to help members address the question of fair presentation. As we come up and go past implementation, Airmic will continue to solicit feedback both informally and through a survey from members and partners. We will collate and communicate the findings and comment on the practicalities and interpretation of the Act.
Clive Clarke can be contacted on firstname.lastname@example.org