The most recent edition in our series of Broker Business Club roundtable discussions, in association with Zurich, took place in London in July. Our panel discussed the opportunities and threats within the highly specialised leisure market.
The debate, held under Chatham House rules, looked at the role brokers and insurers can play in ensuring clients are best protected both in terms of insurance and accessing crisis management and business continuity offerings. National events such as the Queen’s Jubilee and the Olympics were raised and the experts also questioned how specialist brokers were faring in the on-going soft market.
What is the current state of the leisure market?
A Zurich delegate began by pointing out that, with research showing that 21% of income in the UK was being spent on leisure, there remained buoyancy in parts of the sector. However, he stressed that within the over-arching definition of leisure there were a number of dynamic sub-sectors, each with its own challenges. One broker agreed that understanding the specific qualities of a sub-sector, be it nightclubs or holiday parks, was key to success. They argued: “The profile of the business always attracts new brokers and insurers. Specialists are the ones who survive in it for a longer period than others.”
The panellists were in broad agreement that, with low barriers to entry in some sectors, such as opening a restaurant, the market was one with plenty of potential clients but that maintaining standards was all important and this could not be achieved by claiming to specialise across the sector. As one participant pointed out: “If you try to be all things to all men in this sector you are going to fail.”
How are elements such as risk management advice and a focus on business continuity planning being received in a soft market? Are clients only focused on price?
One broker highlighted that in such a diverse sector the skill was really to package the requirements to fit the client’s bespoke circumstances. Another broker asked if their peers were finding it harder to get information from clients in the difficult economic climate and if they were finding that the focus of attention was drifting away from the likes of health and safety requirements? In general the panel responded that, as long as a broker could establish the value of their advice and the products recommended, then clients were still prepared to pay for extra services. Although one attendee argued: “At the moment there are not a lot of brokers adding value so it is a lot more difficult for those niche or specialist brokers when it is all about price, price, price. I’m not saying it is right, it isn’t.”
How have the Jubilee celebrations and planning for the Olympics impacted the sector?
There was a broad consensus that the planning for the Olympics had been an opportunity to look at risk planning and that the topic of brand had been raised more than once, particularly with those directly involved. New emerging risks that could destroy a business’ hard-earned reputation overnight were discussed, with particular focus on the opportunities and threats posed by social media. “How an organisation either embraces that and controls it or lets it happen to them is key,” stated a Zurich delegate. “Being proactive means you can use social media to your advantage.” The brokers felt that it was a positive example of working together with a client in partnership to educate them about risks above and beyond exposures such as fire or flood. “The insurer can add value to the conversation, provided you have the right insurer, that is a pre-requisite,” stated one attendee. “It is about the other costs to the business.”
#News: The insurance industry is putting forward ideas to make it easier for the financial sector to invest in greener assets, unlocking billions of pounds worth of funds which could help mitigate the impact of #ClimateChange https://t.co/icxnybN0Lp pic.twitter.com/68IovgDTJq— ABI (@BritishInsurers) March 11, 2019
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