As New Zealanders experience more frequent and severe weather events, it’s clear that insurance is more important than ever, says Glynn Howell, Executive Manager, Commercial & Personal Lines Distribution at NZI.
“We can expect to see some very real conversations around managing these growing climate risks, whether that be through product changes or changes to how brokers and insurers structure their clients’ programs,” says Howell, who is among the speakers at ANZIIF’s upcoming New Zealand Business Breakfast event.
Championing the industry
Howell has worked in the insurance industry across New Zealand for more than two decades. He started his career at Aon before moving into the underwriting side of the industry with Lumley.
Howell’s experience includes commercial broking, underwriting, local, regional and national management, as well as managing offshore partners in India.
He says each organisation and role has provided different opportunities to enhance his personal development.
“Ultimately, a career in insurance is about the people you get to work with, both internally and externally,” he says.
“We are a relationship business and, for me, many of the relationships I’ve built date right back to the early 2000s when I first began my career in Wellington.”
Howell says his key achievement in insurance has been building a career in an industry that works toward making New Zealand safer for all.
“It’s a career that has enabled me to live and work in some great parts of the country and to build relationships with people from Cape Reinga to the Bluff,” he says.
“I’ve also been proud to see some of those I’ve worked alongside, or led, go onto building their own great careers. Often, insurance is an industry that people stumble into and, only then, realise just how good it is.
“If I could change one thing, it would be to improve how our industry is perceived and to see it as a career of choice,” adds Howell.
“All of us who work across the insurance market need to ensure we are championing what we do each and every day and create a sense of positivity about what we add to our society and economy.”
Technology and customer expectations
Howell has seen an evolution in customer expectations over his time in the insurance industry and says timeliness, advice and technology have been important factors in this shift.
“As with all our society, timeliness has become a critical element for what customers expect from any service provider,” he says.
“Improving this quickly is critical, and technology has a key role to play here to ensure more of our transactional business can be completed digitally, allowing for a greater focus on providing advice-driven value for those customers who require this.
“Generally, clients and customers have an improved understanding and visibility of the benefits of their insurance programs and expect more from us as an industry in terms of what and how we deliver to them.”
Howell says technology will be key to improving how the industry delivers products and services to clients.
“Our industry still has a way to go in the technology space as we move with rapid technological advancements, and we need to reshape what this looks like for all our business models,” he says.
“Given the ongoing impact of climate change and increasing weather events, we need to find ways to improve the performance of our operations and deliver efficiency gains that can assist with the ongoing affordability issue.”
Distribution challenges and opportunities
With New Zealand experiencing extreme weather events, such as catastrophic flooding in January this year and the impact of Cyclone Gabrielle the following month, Howell says climate change is the number one challenge facing insurance distribution.
“While this has been highly visible around the country this year, globally, weather events are also on the rise with insured losses from natural catastrophes topping US$100 billion five out of the previous six years, which was a marker only hit twice in the prior 25 years,” he says.
“As we’ve seen, New Zealand isn’t immune, with 2023 marking the fourth consecutive year where a new record was set in the country for the most expensive climate-related claims year on record, and we’re only in August.”
The escalation of global weather events in recent years is coupled with the impact of the claims inflationary cost environment, which Howell says is placing significant upward cost pressure on the market.
“The combined outcome is having a very real impact on families, communities, and businesses around the globe, so this has become a real challenge for insurers as our focus remains on keeping our customers safe from climate-related risk, paired with affordability.”
Howell adds that the challenge is also impacting reinsurance programs, with international reinsurers increasing their rates to cover costs.
Making the most of opportunities
However, he believes these challenges also create opportunities for the profession.
“The opportunity is how we think differently as an industry and come together to make our communities much more resilient by thinking longer-term and preparing for what we know climate change will bring,” says Howell.
“As well as future pricing for the increasing regularity and severity of these weather-related events, we need to go further and embed climate action into our supply chain, products, and underwriting — including how we approach alternative mobility and vehicle ownership, renewable energy and green buildings.
“Given the significant challenges we’re facing, we all have a responsibility to help inform the customers who put their faith in us around how they are best to manage their insurance risk profile,” adds Howell.
“Whether this is looking at alternate structures to commercial property programs or even how best to structure a customer's domestic insurance, we need to uplift how we interact and provide this advice right across the spectrum of our market.”
Turning these challenges into opportunities will be a focus for Howell in the coming years. It will also be an important topic for discussion during the upcoming New Zealand Business Breakfast.
“As this is an industry event, we all need to understand and be united around the challenges presented to our industry,” he says.
“We have a responsibility to champion what we do every day, whether that be working for a direct or intermediated insurer or a broker, or any service provider to our industry.
“A key to this is our understanding of what is occurring globally, nationally, and locally and how this flows through to our industry,” adds Howell.
“In collaboration with government and local councils, we need to be the insurance experts and advisors for our customers to ensure we can assist in the ongoing insurance availability in New Zealand.”