Insurer, Broker and Insured: Strong Relationship is Key During Times of Crises

15 September 2020


Markel International, London

It would be a significant understatement to say that difficult market conditions lie ahead for the foreseeable future and that all our lives will be different going forward, but six months into the current environment, there are some positive signs developing.

As I write this article, my second screen (how did we ever survive with only one screen?) shows a mass of negative economic data for the world and individual countries. Not quite red across the board, but it is certainly the dominant shade. There is no need to run through the numbers, we are all aware of the challenging times the world is experiencing and by extension, the trade credit and political risk market.

The numbers in terms of insolvencies and defaults for insurers are growing and unlikely to improve in the immediate future. For brokers and the insured, capacity and appetite is shrinking with premium rates rising – an unwelcome combination, but understandable with what all are facing. Whilst this set of circumstances is not unprecedented, the depth and impact is. As is the slightly surreal world we now work in – who could predict we would all be working from home?

However, the market conditions, negative data and press coverage are not the only story. For all the negative information and headlines, the world continues to trade and companies still require protection from bad debts, insolvencies and government action. This is clearly recognised by every major economy, through the Government backed stimulus packages for the trade credit industry rolled out over the last few weeks, and designed to help keep trade flowing.

It is too early to say how beneficial the UK Government support scheme will be, but the very fact that our industry’s importance to global trade is recognised is welcome. The full details of the scheme and how each insurer will decide to respond are yet to be played out, but unlike previous crises, the support is now in place.

Although there will be frustrations with some actions taken within the trade credit market; insurers continue to provide a significant level of cover across many industries and countries, albeit in some instances reduced. The trade credit market broadly remains open for business, though criteria may have tightened and there is increased due diligence being applied, but deals are still being closed and existing policies renewed.

More than ever, the benefit of having a long-term relationship between the insurer, broker and the insured is being shown in that it helps to ensure continuation of cover and support. This is where non-cancellable credit limits, certainty of cover and operating in partnership with insured’s continues to build the trust and understanding, to provide real benefits to the insured. 

Throughout the summer months as the economic fall out of the pandemic took shape, Markel has continued to support our existing insured via certainty of cover and increased dialogue. All underwriters are being constantly asked for an update or a projection on what the current crisis means in terms of numbers and it is therefore of great importance to underwriters that dialogue with the insured is regular and that brokers remain fully involved. The role of the broker in ensuring a good flow of information between the insurer and insured has never been as important as it is now. Through this flow of information, the insurer is better placed to support, to advise patience when required, and where needed, ring the alarm bells. 

It may be a hackneyed phrase, but the partnership between all three parties (insurer, broker and the insured) shows its real strength during difficult times. It is also this dialogue and partnership approach that helps Markel to maintain support for the insured (and by extension the broker) now and to be ready to expand as the crisis lessens.

While it seems unlikely now, there will be a change and the world economy will grow again. However, Markel’s approach will remain the same. We will support our current insured and look for the opportunities where we can work with brokers to develop new business now and in the future, where Markel can add value and certainty going forward.

It might be too early to see the light at the end of the pandemic tunnel and clearly with new restrictions imposed, it may feel we are again taking a step backwards, but this remains a moment in time that will pass and we look forward to working with our broking and insured partners going forward, however interesting the times may be.


About Markel International:

Markel International is a division of Markel Corporation, a US-based holding company trading on the New York Stock Exchange (NYSE: MKL). Markel International writes insurance and reinsurance business through six divisions and through offices across the UK, Europe, Canada, Latin America and Asia Pacific. Markel International’s insuring entities include Syndicate 3000, Markel International Insurance Company Limited, Markel Insurance SE., and Markel Resseguradora do Brasil S.A.

Its UK national markets business also provides legal and professional fees insurance cover as well as legal and tax consultancy services.