Insurance opportunity in local government transformation

Insurers are operating in an increasingly uncertain world, where the term ‘unprecedented’ is in danger of being over-used. 

Disruption caused by climate change and international conflict is changing the ways in which insurers assess risk, challenging us to use modelling and insight in new ways to help customers prepare for scenarios we’ve never seen before but which nonetheless might be just around the corner.

We have to be flexible and accept that there are going to be unknowns. Many new councils will emerge as completely new risk entities, unable to show much evidence of how risks are controlled and mitigated.

Gordon Wilmott, Zurich Municipal

Being ready to face into risks this way, accepting that past experiences can be an insufficient guide to the future, isn’t limited to catastrophes and natural disasters. 

There is a much quieter upheaval taking place across England which is also reshaping risks and requiring us to work in newer, more forward-thinking ways.

On our doorstep

Local government reorganisation may sound like a bureaucratic exercise far removed from real-life consequences but that couldn’t be further from the truth. 

When the remaining two-tier local government in England is replaced by a new structure of unitary authorities on 1 April 2028, it will change where responsibility lies for vital services used by millions of people and have implications for thousands of local council employees.

New insurance contracts will need to be in place on day one to cover a multitude of physical assets and specialist functions, ranging from care homes to schools, and from highway liabilities to collecting bins.

The related data – about property assets, claims history and open long-tail liabilities – is spread across neighbouring councils, often stored on different platforms and captured in inconsistent ways. 

Procurement and risk professionals in local authorities will do what they can to consolidate the information but insurance is just one part of what they’re dealing with. 

That’s a challenge for us but also an opportunity.

Opportunity

Zurich Municipal is a key partner to the public sector and has worked with councils of all sizes for more than 30 years. 

That record puts us in a great position to support local government through the months ahead and demonstrate how much more the industry has to offer.

We’re encouraging local authorities to begin reviewing asset information and improving data quality now, while also providing practical support. 

A new product has been developed to insure the shadow authorities overseeing the transition, and our partners at Zurich Resilience Solutions are ready to work with individual customers to help analyse and prioritise risks so they can be managed as effectively as possible.

We have to be flexible and accept that there are going to be unknowns. Many new councils will emerge as completely new risk entities, unable to show much evidence of how risks are controlled and mitigated. 

We also recognise the need for greater collaboration to help counter the loss of expertise because of the number of risk experts expected to retire. 

With unitary councils responsible for complex services and challenging claims, we’re already seeing an increased demand for the insurance training that we offer to help upskill council teams.

Empathy

Something which has been fundamental in shaping our partnership approach to local government reorganisation has been pausing to think about the individuals involved. 

The new structures will create opportunities but they also bring great uncertainty. Some employees may be asked to relocate or will find their roles change significantly. 

Even those that stay in the same team may find themselves alongside different colleagues. That’s a lot to come to terms with while also working on a once-in-a-generation change programme.

Roundtables we held early on showed how helpful and comforting participants found it to share concerns and hear about others’ experiences. 

This has led to an expanded programme of events with specialist webinars in the works and an online hub of practical resources to bring everything together. 

Just as importantly, we’re making ourselves available to listen and talk over issues.

Partnership ahead

Local government reorganisation presents challenges for councils and insurers alike, but it also offers a chance to demonstrate the very best of what our industry can do. 

Organisations are being asked to make decisions with incomplete information and against a backdrop of significant change. 

This is the moment for insurance to show it is more than simply a transactional service, but that it can provide confidence and stability.

If our sector embraces that role, the benefits should extend beyond the period of transition. 

Stronger partnerships, better risk management and improved data will all help leave local government better prepared for the future. 

More resilient local authorities make for more resilient communities – a win for residents and insurers alike.