Global insurance centres have been virtual ghost towns in recent months and there is a growing realisation that the return to a post COVID normal will not see a return to the bustling streets of offices that have defined the likes of London, New York, and Singapore.
Whilst the social distancing measures implemented by governments across the world saw a sudden switch to remote working there had been an expectation that once September came staff would be returning to their offices.
However, it has become increasingly obvious to many that increasing numbers of staff are set to stay at home when the pandemic passes.
Insurers Beazley has said it believes that the number of staff at their Lloyd’s boxes will be reduced post COVID and it is a view shared by many in the market.
It will have a knock on effect for business districts across the planet. A reduction in the number of staff physically in the office may well help in the short term as employers need to put in place distancing controls in offices which will be aided by the lack of numbers.
But in the medium to long term it is likely to see firms re-evaluating the need for large and expensive offices as staff stay at home. That said if you take London as an example the city has built an infrastructure to support thousands of workers each and every day. Bars, restaurants, cafes, sandwich shops have all been established to meet the demand from those who world in the square mile.
A sudden and sizable reduction in staff numbers will put additional strain on that infrastructure as demand for their services fall.
The feedback from many underwriters and brokers has been that the renewals were completed with little issues remotely. However, the ability to access new business has been impacted by the inability to meet face to face.
Technology will have an impact as the subscription nature of the London market does not lend itself to remote operation compared to other areas of the insurance industry.
The death knell has yet to be rung on the futures of London, Singapore, and New York as physical financial services centres, and it is highly unlikely that they remain the deserted streets and buildings we have witnessed.
But it is clear that the numbers that will return will be significantly down on those that left.
Some are already making plans for the future and many will have some tough decisions to make. The choice between enabling staff to operate remotely compared with forcing staff back into the office is an easy one to make in the days of Corporate Social Responsibility. Defining what the insurance office of the future will look like is far tougher given the questions that still require answers in the coming weeks.