Mactavish has slammed the creation of the insurance industry's new pandemic steering group, branding it little more than a "cynical ploy" and a "PR gimmick" designed to detract attention from its failings.

The group, whose inaugural meeting took place Friday, was formed to examine the response to the coronavirus crisis and future pandemics. It is chaired by industry heavyweight and chairman and CEO of Convex, Stephen Catlin. Other notable names on the panel include Maurice Tulloch, CEO of Aviva; Stephen Hester, CEO of RSA; and Julian Enoizi, CEO of Pool Re.

“In terms of pandemics, SARS and MERS means the industry has had ‘trial runs’ to learn from, but still it failed to make itself sufficiently relevant to this crisis," commented Bruce Hepburn, CEO, Mactavish. “The sector has failed in its response to coronavirus and by the time this new steering group makes any recommendations, thousands of businesses will have gone bust. It’s a cynical ploy and PR gimmick to help draw attention away from its failings unless it focuses more on how it can help right now.

“The steering group’s current membership consists solely of insurance professionals, meaning it’s a little like marking your own homework. Will they really hold the industry to account and shine a proper light on its failings and make the radical recommendations for change that the sector needs, or will they simply pass the buck on to the government?”

“Why wasn’t this group formed to look at this risk after SARS, MERS and the other trial runs the world has had? This problem needs to be solved by a new generation of people with a different perspective on the role of insurance in society."

The consultant says the problems which have been laid bare during the crisis are not new, and flagged the recent launch of its own Reform Agenda to "expose the failed direction of travel of the industry over the last 20 years in terms of insurance contract quality and fitness for purpose".

“Over the last thirty or forty years, the commercial insurance market has made a collective strategic error," Hepburn added. "By marketing insurance as a price-driven commodity it sowed the seeds of its current difficulties. A complex financial instrument capable of preserving or breaking a company’s balance sheet has been sold as if it were essentially interchangeable. All too often, policyholders only realise that this is not the case when they have a claim reduced or denied unexpectedly - causing real economic damage and further tarnishing the reputation of our industry.”

Share Story: