Current events and high-profile topics should be used as an opportunity by insurers to extend insurance products and give peace of mind to customer concerns.
Following the UK’s vote to leave the EU, AIG has used Brexit as an opportunity to expand and diversify its directors & officers (D&O) insurance product. At the end of July the insurer extended its D&O policy to cover Brexit-related residency and repatriation costs. This month AIG also announced the provision of Brexit advice for its D&O policy holders through its partnership with law firm Dechert.
AIG has used the context of Brexit, which has created political and economic uncertainty in the UK, to its advantage. The insurer has diversified its D&O product from the rest of the market and helped to provide clients with some peace of mind. More insurers could look to extend their cover in such ways. There is much more scope for insurers to develop their products to diversify the market and keep up to date with current risks and concerns.
The UK economy and business prosperity are influential to the D&O claims environment. If there are political or economic issues which put pressure on businesses, the number of employment and management claims increases. For example if a company is negatively impacted by a recession, insolvencies, redundancies, business restructures, and other employment issues will lead to a period of higher claims frequency. Brexit could therefore create greater demand and uptake of D&O cover, and if clients are particularly concerned about Brexit, AIG’s product extension is likely to see the insurer gain competitive advantage.
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