Mid year review

Posted: 29 July 2020

Neil Clutterbuck, Chief Underwriting Officer, provides his views on key events which have shaped the industry in the first six months of 2020.

Reflecting on the year so far, it’s impossible to ignore the global emergency which has dominated for the last few months. But whilst the Covid-19 pandemic has irrevocably altered our lives in ways we never imagined, including how we work, communicate and socialise, it’s been an eventful year for many other reasons.

Brexit, natural catastrophes and political unrest have all continued to play significant roles and present both opportunities and challenges for the UK insurance industry, as it evolves to cater for new and emerging risk profiles faced by businesses

COVID-19 (Coronavirus)

Rarely does mankind experience anything as monumental and devastating as a global pandemic. When the first cases were reported in Wuhan in December 2019, few could have imagined the events that would follow. At time of writing, there have been over 15 million confirmed cases and 619,000 confirmed deaths worldwide, with 45,501 deaths in the UK.1 There’s scarcely an individual who’s not been affected in some way by the virus.

Impact on business and FCA court test case

Businesses have also suffered; a fact which is reflected in the turbulence observed in global financial markets and, closer to home, economists have predicted the UK economy is heading into a deep recession. The insurance industry underpins UK businesses and insurers have come under scrutiny at the point many consider to be the ‘moment of truth’. At Allianz we’ve always been committed to treating our customers fairly and have continued to make payment on all claims where we’re satisfied that claimants are covered by their policies. Whilst there’s inevitably been some difficult messages where policyholders were not covered, to date we’ve made payments on over 900 Covid-related claims and settled 475.

An outcome to the FCA (Financial Conduct Authority) High Court Test Case, which seeks to resolve the issue of whether business interruption losses resulting from Covid-19 are covered under certain insurance policies, is expected in August. We welcome the steps outlined by the FCA and believe court rulings can be a useful exercise in providing necessary certainty for the industry and for businesses. As such we’ve worked closely with the FCA to provide them with any relevant information and are undertaking a review of our products in line with their guidance. It’s imperative that insurers and brokers continue to act in the best interests of their customers through offering products which are relevant and provide value for money.

Supporting our customers

We’ve adopted a number of measures to support our customers through the pandemic, both individually and collectively. These have included amending our policy unoccupancy conditions, taking a more flexible approach regarding changes to business descriptions and working closely with brokers to ensure that customers aren’t unintentionally uninsured by difficulties with renewals.

Our engineer surveyors, who are classified as key workers, have been working hard to make sure that factories, hospitals and other key services are safe and can continue to run smoothly, and in April we quickly prioritised early inspection of six lifts at the Nightingale NHS hospital prior to the admission of Covid-19 patients. I’m extremely proud of how Allianz has responded during this time.

Remote working

When the UK lockdown was announced on 23 March most companies were suddenly faced with having to move employees to a remote working model as quickly as practicable. This presented a number of challenges for businesses, such as supplying equipment, diverting phone lines and ensuring IT security measures could still be met. However, it was also an adjustment for employees, with many having to juggle work with childcare or caring for friends and family.
Man working from home
Employee welfare has arguably taken on even greater importance than previously. At Allianz we quickly moved the majority of our workforce to homeworking within days whilst implementing measures to maintain our usual high service levels. However, recognising that employees would need certain support in their new situations, we adopted various measures for this; these included promotion of our wellbeing resources and partnership with our corporate charity Mind; sharing experiences through our employee networks (particularly the ‘Working Parents’ group); and increasing employees’ paid volunteering leave during Covid-19. At a smaller level, teams have been running their own quizzes, karaoke sessions and virtual raffles.

As the UK eases itself out of lockdown, companies are now faced with the arguably greater challenge of safely returning their employees to the office. A recent survey2 showed that two thirds of insurance staff are reluctant to return to the office with 90% particularly anxious about using public transport. The Covid-19 pandemic has likely changed the way we work forever with companies such as Facebook announcing that half their future workforce will work remotely.3

In many ways digitalisation has paved the way for this working model and many insurers are already leveraging various technologies for policy handling and claims assessment, such as video streaming platforms.

Restarting businesses

In early July many were delighted by the reopening of pubs and restaurants in England and Northern Ireland. As other business owners planned a return to operations, they were tasked with managing a number of risk-related and logistical considerations. To assist with this, we created a wealth of resources with sector-specific advice including considerations related to employee and customer communications, buildings and site inspections and equipment and machinery checks.

Insurance is likely to play a key role in the aftermath of Covid-19. Companies of all shapes and sizes will clearly be thinking more about their resilience, their risk management capabilities and the detail of their insurance needs going forward. This reasserts the role of the broker in providing the expert advice required to guide the customer through these considerations. We may also see increasing customer demand, at least in the short term, for propositions which provide greater levels of flexibility as customers look forward expecting a period of economic uncertainty.


The 14 June saw the third anniversary of the Grenfell Tower tragedy. Following the establishment of the Building Safety Programme, the National Audit Office (NAO) launched an investigation into remediating dangerous cladding on high-rise buildings. It’s reassuring to see progress being made in addressing this critical issue although some frustration remains around the pace of change, with advice that necessary work may not be taken on some at-risk buildings until mid-2022.

Allianz has undertaken significant work to understand the detailed nature of construction, working closely with brokers and customers to identify risks that would carry such cladding.

With the support of our loss control engineers we’re also working constructively with customers to support programmes of remediation and we’re undertaking work to address any deficiencies. We’ll be monitoring the NAO’s remediation work with interest.
Tower block


If any positives can be taken from a global pandemic, they may be found in nature.

Scientists have named the global temporary slowdown in activity the ‘anthropause’ and reports have shown some positive impacts of the lockdown upon the environment, such as a reduction in air pollution and environmental noise levels. Conversely there have been some negative indirect effects due to safety measures including temporary bans on reusable coffee cups and an increase in online shopping and food ordering.

In early July, Allianz celebrated its second ‘Sustainability Week’ with the theme “Reduce, Reuse, Recycle – Virtually”. During the week employees shared tips on how to ‘digitally declutter’ and made sustainability pledges. It was a timely reminder of the responsibility organisations have towards managing climate change. Once again we’ve witnessed extreme weather events this year, with Storm Ciara in February which saw Allianz pay 12,000 claims. We take our responsibility extremely seriously and as such joined RE100 with a target of sourcing 100% renewable energy across our global operations by 2023. We’re also a founding member of Net Zero Asset Owner Alliance, an international group of institutional investors with a commitment to transition their investment portfolios to net-zero GHG emissions by 2050.
On the renewable energy front we’re proud to be the largest investor in renewable energy, and last year we invested 7.2 billion euros in projects such as 90 wind farms and nine solar farms across the world. However, we realise there’s always more we can do, both individually and collectively as an organisation and I was interested to learn that even an action as small as sending fewer emails can help; each email can carry a carbon footprint of anywhere between 0.3g and 50g of CO2 emissions).4 This is particularly pertinent under the widespread working model where reliance on email has increased.


It would seem remiss not to mention Brexit in a year when the UK officially departed the European bloc. The post-Brexit transition period expires at the end of this year and it’s been agreed there’ll be no prolongation. With the UK already facing economic strain as a result of Covid, it’s feared this could intensify as the true impact of Brexit starts to reveal itself. UK insurers have already witnessed claims inflation trends across many lines of business and will need to monitor this ever closer in a post-Covid world.

It remains crucial to work closely with brokers in supporting customers to limit their exposures and keeping claims costs down through risk management expertise and guidance. Whilst the insurance industry faces the threat of some disruption, the sector is generally well-placed to deal with this, having been preparing for the eventuality of a ‘no- deal’ since the referendum. At Allianz we’re no different and as part of Allianz Group we’re able to leverage our strong global network to continue to provide multinational solutions to the needs of our customers and support them through the Brexit journey.

Woman holding EU flag


I’m sure I’m not alone in hoping for a somewhat less tumultuous period in the second half of 2020. It’s been a challenging time for individuals and businesses whose resilience and adaptability has been tested to the extreme. Primarily our role as an industry is to enable people in their working and personal lives. We achieve this first and foremost through our strong relationships with brokers and we’re constantly looking at new and creative ways that we can engage with them to further improve our service proposition. Now is the time for insurers and brokers to demonstrate their true value.

1 World Health Organisation. June 2020.

2 Insurance Resilience Survey: Coping with Covid-19: Insurance Post.

3 Financial Times: Facebook to shift permanently to a more remote workforce. May 2020.

4 EuroNews 2020. “Wondering what you can do for Earth Day at home? Clean out your inbox”