Lockton is positive about the future for risk managers
Julian James, chief executive officer, Lockton believes that the message coming out of this year’s FERMA Forum is a positive one. But, in an exclusive interview with StrategicRISK, he warns that the tough times are far from over.
‘The industry has demonstrated that it has weathered the crisis of the last 12 months pretty well,’ explains James. ‘A year ago we were dealing with the impact of what was going to happen with the banks and with insurers like AIG. The industry has come through remarkably unscathed.’
Progress has been made. ‘This time last year most insurers were talking about the need to increase premium. Now the conversation has shifted to them recognising their clients are going through a tough time and that premium increases are neither feasible nor realistic in today’s environment,’ says James.
He adds that he has been ‘quite encouraged’ at the Forum by the constructive dialogue taking place between carriers and clients with insurers looking to help solve problems for clients rather than just pushing through automatic rate increases.
However, he points out that the reality is that most clients are still facing an extremely difficult and uncertain future. ‘Whichever way you view the world economy it is very clear that the next 12 months are going to be tough,’ James warns. He stresses that the insurance industry needs to recognise that and to make sure that it responds to what is going to be a continuing tough trading environment for clients.
‘Some people are optimistic and say that there are green shoots appearing but it is premature in my view to say that the tough trading conditions are over,’ he says. ‘Unemployment is going to rise. There is a very real risk too that there will be inflationary pressures in the world. Indeed, we heard on Tuesday (6 October) that Australia had put up its interest rates – a sign that it is concerned about inflationary pressure.
‘Although we may be able to see the light at the end of the tunnel, we are very much still in that tunnel,’ concludes James.
Lockton is one of the six independent European brokers that form the partnership of EOS RISQ which is exhibiting at the Forum.
