There has been a lot of talk lately about how wholesale insurance and retail insurance are very different creatures. In the wholesale market, customers are often multinationals with large risk, legal and procurement functions. They often have more capacity to litigate than the brokers they do business with. In the retail market, the David and Goliath dynamic is switched; it’s the insurers with all the resources, while consumers enter into potentially life-changing contracts on their mobile phones while watching reruns on TV.

There is a lot of truth in the distinction, and it does support arguments that say that regulation should treat the two markets differently. Nevertheless, all insurance contracts are based on trust. Even multinationals have to trust insurers to have the operational wherewithal to pay claims accurately and efficiently – by the time they litigate, those two prizes have disappeared.

There is no stronger test of trustworthiness than the way in which insurers treat people with the lowest levels of financial capacity or resilience. That is why the government’s recent strategy on financial inclusion is crucial to all insurance, not just retail. The areas it addresses are sometimes broad, such as supporting consumers in vulnerable circumstances; and sometimes more focused, as with addressing the needs of survivors of economic abuse, or signposting for people who are struggling to obtain cover.

The way insurers respond to these problems will tell all kinds of customers and investors about the capacity for the entire sector to meet new challenges. If insurers can make home insurance more relevant for renters, it also says something about the ability of insurers to cover commercial cyber risks. Similarly, if insurers can find ways to make their products work for people who have experienced economic abuse, it says something about how insurers can go beyond just transactional services, and supply employee rehabilitation programmes.

As Alex Reynolds, chief claims officer for Marsh, has said about claims management in the London Market: “Technical skills will only get you so far. It’s the ability to understand and respond to the emotional state of the client and build trust, even before a claim arises, that differentiates a good claims handler from a great one.”

Financial inclusion is not a woke cherry on the top of the insurance cake – it is the essential ingredient. A profession that can find new ways to serve more people will thrive in every potential market. A profession that writes off markets as being ‘too difficult’ to serve will shrink and ultimately be replaced by other methods of managing risk. Financial inclusion is where insurance lives and dies.

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