Day two of the Conference saw delegates a little bleary-eyed after the previous evening's hard-fought quiz provided by Platinum Sponsors Kennedys. But Phil Farrar, from Risk Management Partners, pepped up delegates at the first talk of the day, handing out sweets to delegates.
Phil discussed the impact of inflation on policy cover and how challenges in the supply chain are affecting claims inflation. For example, it takes four months to get a Tesla windscreen. The Chartered Institute of Loss Adjusters are reporting that 40-45% of property claims have an element of under insurance and the degree of under insurance averages at 35-40%. It was an interactive talk, with Zurich contributing too, creating great cross-insurer working.
The reality around claims is frightening. The hard-hitting facts weren't designed to scare us but to make us think and realise we must all improve our processes.
Then Ruth took the stage along with Andy Desmond from Marsh, to speak about owner controlled insurance programmes. They gave an overview of the options for insuring projects and of having an OCIP programme in place for large infrastructure projects. Andy talking in general terms and Ruth followed up with the practicalities of the programme and how it is done in Edinburgh.
We wanted to make sure people are thinking about OCIPs as we don't really do them in Scotland. The message was that OCIPs aren't scary, just use them.
Our sponsor experts joined forces for the insurance break out session. We were joined by John Shaftoe, from Maven Public Sector, Phil Farrar, from Risk Management Partners, Anne Norrie, from Zurich Municipal, and Lesley Allan from Kennedys.
It's the most aligned I've ever seen all four Platinum Sponsors. They were really feeding off each other.
There was a lively discussion about procurement and how, although it is a bugbear for insurance companies, it's something we have no influence over.
The panel all agreed on one thing. We are going to have to be more engaging when it comes to tender and stop using tenders from the past 20 years. It's not from laziness, more that it worked last time, but that needs to change.
After lunch Derek Jamieson, Director of the Chartered Institute of Internal Auditors examined the evolution from the widely known and deployed Three Lines of Defence, to the recently launched Three Lines Model. He explored the relevance and highlighted good and bad examples of its practice. He concluded that the Three Lines Model is still relevant but it is no longer just about defence.
Meanwhile Alex Sawyers, from Gallagher, and Matt Lonsdale, from Brawdia, explored the impact of construction cost increases and why this has taken place. They focused on how recent rises could cause building and portfolios to be underinsured and stressed why it's so important for us all to have an up-to-date building valuation to manage this potential risk.
Matt warned that tender prices in Q4 of 2021 rose by 4.9% compared with a year earlier, and he had seen a 30% increase in property valuations after just three years.
Nick Boyton from Aon, closed the Conference with a presentation on the Great Convergence, created by the five key trends that are rewriting the way organisations think about talent. When Nick spoke, about the attrition of staff, delegates pointed out that they are having problems with people even applying for jobs.
Everyone in the room had that problem. Not just councils, but the NHS, all of the Scottish public sector. Now the private sector is offering home working contracts - that's a game changer.
The talk provoked a lot of discussion and emotion about what actions to take in such challenging times. You can read more about the Great Convergence in the July 2022 edition of stronger.