We live in a changing world, always evolving but never more quickly than in 2020! The education environment has been severely disrupted but schools have demonstrated how successfully they can adapt to new and different ways of working. Some of the innovations we have seen will undoubtedly become part of the new normal.
Similarly, the insurance industry has been challenged. The pre Covid-19 insurance market was demonstrating the sure signs of hardening (premium rating increases, the introduction of restrictions and limitations on cover) – not surprising after the soft market conditions which had prevailed for almost two decades. Schools may be yet to feel the full impact of these changes but there is plenty of evidence that the pandemic has prompted a rapid acceleration in the rate of change*, the effects of which will be felt for some time to come.
Originally launched in May 2019, the Independent Schools’ Mutual was somewhat lost in the pace of events in that year as TPS and Brexit absorbed much attention. The re-launch of the Mutual planned for 2020 has also been a victim of the pandemic as schools focused on running their operations in the best possible way – providing education to their pupils and support to their staff. But now we are all looking forward again; the Mutual is back on the agenda and more relevant than ever.
Here are a few reasons why:
- schools in control – the Mutual belongs to its contributing members
- along with control comes transparency, with Members having the accounts of the Mutual available to them
- strategy is set by the Board, elected from the membership
- there are no external shareholders seeking a return – Members share in the success of the Mutual through any surplus generated
- collaboration on risk management and the promotion of best practices
- secure – claims are paid either from the Mutual fund or the supporting insurance programme
- flexibility of coverage
- discretion over the response to unforeseen circumstances
Let’s be clear, this does not mean that the Mutual would have been able to say that business interruption claims arising out of Covid-19 would be paid. The protection wording details the cover provided and unfortunately, no insurer will support this cover going forward (at least in the short term). What mutuals have been able to do, however, is respond to their Members with innovative approaches.
By way of examples:
- The Livery Companies’ Mutual returned a proportion of their annual contribution to Members to reflect the lower level of risk exposure during the lockdown
- The Activities Industry Mutual provided a contribution payment holiday for those members paying by direct debit, removed cover which was not required due to the cessation of business activities and adjusted contributions accordingly, making mid-term refunds as appropriate
- The Retail Mutual set up a dedicated Covid-19 resource hub for its Members, introduced flexible payment options and waived the requirements of its Unoccupied Premises clause
The Independent Schools’ Mutual, supported by a robust insurance protection programme, provides an opportunity for schools to come together as a sector with real influence to protect against risk, to work together on risk management and mitigation, to operate within a collegiate environment and ultimately benefit from its success.
David Russell is the Chair of the Independent Schools’ Mutual. David retired from the position of CEO of the Harpur Trust in 2019 and shares why he is excited to be involved with the Mutual.
‘‘Although I’m not an insurance expert, I have a good idea of what schools need for their cover. This is an opportunity for schools to do something, as a sector, about one of the core costs that come up every year and which can be controlled. The changes in the insurance market we are seeing and the anticipated further changes make this an ideal time for the Mutual – an opportunity for the sector to work together – which it has shown it can do so effectively.’’ David recognises that the process of joining the Mutual must be smooth. ‘‘The Mutual will be a one stop shop, it will support schools with account management and dedicated claims handlers. Risk will predominately be placed within the Mutual but where traditional insurance is required the Mutual, through its managers, will arrange this.’’
To find out more please visit www.independentschoolsmutual.co.uk or call 0207 100 9446.
*Marsh Global Premium Index for the second Quarter of 2020 reported a 31% premium increase in the UK market