A pioneer in the insurance industry, Lawrence Pavia, managing director of Island Insurance Brokers, said the sector is responding very well and appropriately to the current circumstances. 

“Within days most operators were operating remotely and while already having shed away certain embedded practices, the industry has already started adapting and reshaping its future,” said the managing director of Island Insurance Brokers. 

“Being prepared for any eventuality is the spirit behind the idea of being insured or uninsured. And we too were prepared so much so that with the first signs of the pandemic erupting, the first immediate action we took was reverting to the business continuity plan we already had in place to ensure that all that needs to be in place are not is there and to redefine it to developing circumstances. An internal task force was set up where all involved meet or met daily and all have or had a specific function to perform, cascading down through all organisation.” 

While Island Insurance Brokers’ portfolio features some of the top corporate brands in Malta, Pavia pointed to the fact that albeit some more than others, all clients have had to adapt to the different circumstances. 

“Everyone was affected whether it is a hotel or a restaurant or a manufacturing operation. On our part we tried to get in touch with those mostly affected to try and see how we could be of assistance to them. Changes to insurance programmes and policies needed to be carried out promptly to cater for the circumstances prevailing to the individual clients.”

Malta is very resilient, and most will survive, but not unless we adapt to the new realities

Pavia stressed that given how brokers and insurers are dependent on one another, cooperation and understanding of the changes brought about by COVID-19 need to be exercised by both. 

“Of course, there is still a feeling of shock among some operators, not just on the way that the industry operates, but also on the effect the situation is likely to have on their results. But I must say that even the regulator has been very pro-active in its approach, issuing guidelines and expectations from operators which helps us act in unison.”

Asked for his opinion on the business support measures announced so far by government, Pavia said it is understandable that any support the government gives, this will never equate the normal operations one was used to. 

“One appreciates that some industries will suffer more than others, and we in the insurance industry will also suffer the consequences both in terms of potential higher operating costs and reduced revenues. One tends to think the financial services industry will not suffer, but that is certainly not the case.

“So far however, the industry is coping well, and I have not seen any signs of distress neither from insurers nor from brokers. 

“Operators need to acknowledge we are part of the ecosystem and need to play our part positively.”

In a similar manner to supporting clients and industry, Pavia also believes in the importance of supporting staff, who might not be used to working remotely.

“Thanks to technology, we are keeping in touch between us not only to discuss work-related issues but also to maintain the amazing synergy that exists between us. We meet virtually to have our lunch breaks together, interact socially and encourage each other to keep up some form of physical exercise as this helps our mental well-being.

“However, I remain a social animal and I miss my interaction with my colleagues and clients. Personally, I must admit, the first few days were disorienting until I organised my own space and made it a point to start being disciplined in separating my work and time with the family and for myself. This is crucial especially when we are now working unrealistic hours.”

What will be the main lessons post-COVID-19?

“Necessity is the mother of invention. Whatever seemed impossible or difficult pre-COVID, became doable in a matter of days. Such as the use of paper and printing. We suddenly became a paperless industry, which until a few weeks ago seemed unrealistic. This also applies to how we are now embracing concepts like remote working, more use of technology and cashless transactions.

“I hope that from now on, we will keep going forward and not regress to some of the archaic practices we have been indoctrinated to accept.

”As for the global insurance sector, there will be challenging times for some operators, but also opportunities. Consolidation will continue and I do predict some new mergers and acquisitions internationally. Smaller operators will undoubtedly struggle because of the scale and necessity to invest in technology and bolstering of the capital base required as result of regulations and the pressure put on revenues and profits due to the foreseeable recession.

“Malta is very resilient, and most will survive, but not unless we adapt to the new realities. Standards will be higher, expectations from clients and regulators will be steeper and more challenging and these factors will distinguish the best from the rest. Those who will not adapt or invest will fall by the wayside.

“Every operation will struggle, and challenges will be there, but the wise ones will see these challenges as opportunities. My advice would be to question your past ways, let go of the inefficiencies and strive to make tomorrows’ operations more efficient.”