The challenges we face in the next 25 years

  • In the 25 years since its foundation, Zurich Municipal has cemented its position as one of the UK’s leading public-sector insurers
  • We are now looking ahead to the next 25 years and beyond
  • Four of our company heads predict what challenges their sectors will need to overcome going forward

Zurich Municipal is 25 years old this year, and during that time the company has gone from strength to strength, cementing its reputation as one of the UK’s leading public-sector insurers.

With one successful quarter-century coming to a close, we look ahead to the next one and beyond. As part of this forward thinking, we sat around the table with four of the company’s senior figures – Head of Housing, Allison Whittington; Head of Charities and Voluntary Organisations, Gordon Wilmott; Head of Education, Tilden Watson; and Head of Public Services, Rod Penman – to discover what they predict for their respective sectors in the next 25 years…

The world is changing and evolving rapidly, throwing up new challenges all the time. What do you see as the biggest ones facing organisations in your sector in the coming years?

Allison Whittington: The Housing sector has a huge part to play in providing housing to meet the demand we have as a society. As a result, constructing buildings that are robust, sustainable and safe is probably top of the pile. As part of this, it’s important to make sure the tenure mix is right, so increasing the supply of homes for social rent as a proportion of the total housing supply will be a particularly tough nut to crack. Finally, continuing the journey towards digital solutions, automation and robotisation, plus coping with whatever Brexit throws at us.

Gordon Wilmott: Remaining in touch with the public’s expectations of charity conduct and governance is always a priority. Then there are the challenges thrown up by the political sphere – government instability; the continuation of austerity and the widening wealth gap; two-party politics and devolution are all factors that continue to provide an unstable environment for charities to negotiate. No one knows for certain what will happen after Brexit, but if forecasts of its negative impact on the UK economy turn out to be correct, it will create more demand for support, and from a broader section of society – not just the traditionally vulnerable groups. Will charities be able to cope? Finally, there’s staff retention and recruitment – the charity sector is behind the curve on overall levels of pay, the gender pay gap and inclusiveness. These issues need to be addressed.

Tilden Watson: The education sector faces a multitude of challenges, both in the short and long term. For a start, pupil numbers are rising, and yet there’s a shortage of teaching skills. Continuing austerity is leading to social consequences, which has a knock-on effect for schools. There’s a constant need in our sector to adapt to new technologies, and to navigate global politics to attract students from around the world. And, as with every other sector, there are issues of income equality and social mobility.

Rod Penman: Brexit, because of the uncertainty. Public-sector organisations know that it’s going to affect them, they just don’t know how and to what extent. The other biggest challenges are the continuation of austerity, local government reorganisation and the precarious financial state of some local authorities. Some councils will go bust – it’s just a case of how the government responds to that. I also think that, in terms of reorganisation, we could see some district councils being wiped off the map.

Insurance companies are right at the forefront of these societal and political shifts, as there is a constant need to monitor emerging risks. Looking ahead, what potential risks have you identified in your respective sectors?

AW: Housing associations are increasing their build programmes for market sale, and using the proceeds to supplement their builds for affordable and social rent. If their market sales don’t go as planned, the reliance on sales revenues is a risk. Then there are the changes in government policy – housing policy, rent settlement, welfare reform, etc – and shifting interest rates. With housing associations having high levels of debt, these are all concerns.

GW: With the government struggling to produce a coherent policy to address the growing social-care challenge, the demand for services will increasingly fall to the voluntary sector. And then, of course, there’s the increasing pressure on our natural resources, and the impact this could have on demand and support.

TW: Clearly, Brexit is going to have a profound impact, particularly on the higher-education sector. And generally, austerity will have an increasing impact in the classroom, as many of the support mechanisms that once helped schools are no longer in place.

RP: Cyber risk is going to be a massive issue, and it’s very hard to predict how it will evolve. Commercialisation is another – we will continue to see local authorities entering into retail and other commercial areas where they are the new boys in the market. They won’t have the experience of those they are competing against, and they will have to take risks to succeed. Brexit is also a long-term risk in terms of the public-sector workforce – we don’t yet know how many EU workers will go back to their home country.

Technology is advancing at a rate of knots. How do you see new developments shaping your sector – whether that’s in a positive or negative way?

AW: I think we’ll see the Internet of Things becoming more prominent in maintaining the quality of housing, managing risk and helping supported living. The automation of tasks will generate much greater efficiency.

GW: The Fourth Industrial Revolution – robots – could have a major impact, as they have the potential to reduce injury risk for employees and improve service use. I think the sector embracing ‘open source’ models could be another interesting one – such models exist to serve their beneficiaries rather than shareholders, with increased data sharing and collaboration enabling us to tackle important issues such as disease prevention, crop development, etc.

TW: I think – and hope – we will eventually see more teaching by robots who can assess facial expressions and student understanding. On the downside, we may become more vulnerable to cyber threats.

RP: AI and robotics could have a huge impact. We are already seeing examples of services like social care being delivered using robotics (Peppa, the social-care robot in Southend, for example). Some chief executives will see it as a great opportunity, while others will see it as a challenge because you risk losing the human touch.

Finally, if we could ask you to use your imagination for a moment… What futuristic gadget or invention would make your life easier?

AW: A truly autonomous car. Imagine what I could do with all that extra time – and there would be no more arguments over who drives after a night out.

GW: Teleportation – well, it would surely be more reliable than our train services!

TW: Time travel would enable me to go back and correct all my mistakes from the previous week. And flying cars would be nice.

RP: A way of expanding each day to 48 hours so that I could get everything done. Or, failing that, a golf club with a 100% sweet spot!

Whether it’s down to austerity, Brexit, government policies or the introduction of new technology, there’s one thing all of our interviewees can agree on: the future is full of uncertainty. However, with 25 years of public-sector experience and knowhow behind it, Zurich Municipal is perfectly placed to navigate the challenges that lay ahead.