Coronavirus has not only been tough on financial centres like the UK and the US, but also on the smaller jurisdictions of the world.
But their diminutive size does not mean they are not global forces with resilient infrastructure.
Financial services has long been a key industry pillar for the Isle of Man, so how has it dealt with the outbreak?
Mobilised quickly
Michael Crowe, chief executive of the Isle of Man Finance Agency, told International Adviser: “I do know that all the life companies are continuing to write business from different parts, and that’s with their customers in different parts of the world.
“So, as close as possible, people are operating almost business as usual. If we turn the clock back four months, I don’t think any of us had any idea of the whole sector having to implement business continuity plans overnight.
“It’s clear that the businesses and teams have mobilised quickly and have been flexible and robust.
“Within financial services, I think we’ve proved we have to continue to service clients the best way we can.”
Hub for life insurance
The UK crown dependency has historically been the centre of the global life insurance sector.
“Following conversations with a number of the life insurance and wealth management company chief executives in recent weeks; it is pleasing to report that, after lockdown, all companies immediately put their disaster recovery plans into play, with great success,” Simon Pickering, head of insurance and pensions at the Finance Isle of Man, told IA.
“They have been up and running very quickly and able to continue writing new business and servicing existing business.
“Some ran online seminars with brokers, which have been well received.”
Code
One of the big talking points for the life insurance sector on the island over the last couple of years has been the commission disclosure rules, which came into effect on 1 July 2019.
The Insurance (Conduct of Business) (Long Term Business) Code 2018 requires firms to issue key information documents (Kids) and a summary information document (Sid) outlining commission to clients.
But has the code been a regulatory burden since the outbreak?
Pickering added: “The IOM Financial Services Authority issued a press release on 7 April 2020 which set out its forbearance provisions for the submission of financial and regulatory returns.
“At that time, they also stated that they will continue to keep a watching brief and monitor the situation to identify whether other regulatory requirements may require a different approach.
“There have not been any requests to make changes to the code, which has been working well.”
New business without travel
Travelling to destinations near and far has all but been wiped out by the pandemic.
So firms have had to adapt.
Crowe said: “I think what we’re seeing is the change in the way people work.
“In terms of business travel and other jurisdictions, obviously, there has been impact on business flows in terms of jurisdictions in degrees of lockdown.
“But, a lot of the intermediaries and the advisers have also migrated to working like this. It’s certainly something that people are not reporting problems or issues as yet.
“One thing we’ve all got to bear in mind is that we hope that all of us will be working and going back to the degree of normality in the short- to medium-term.
“And that will help facilitate business flows in future. But for the time being, I think it’s pretty fair to say that the sector is operating well.”
Enquiries
IA also asked Crowe whether the island has attracted new business since the pandemic as firms look to settle elsewhere
“Before this scenario, we did have people who were actively looking at the Isle of Man, and we were working with them.
“That continues. And we have had more enquiries, businesses who want to learn more about the Isle of Man. Now, I don’t want to say that the two things are related.
“I think we have demonstrated resilience, I’m sure that it is something that people might think is an important factor.”
Employment
One of the biggest struggles the island faces is employment.
The Isle of Man has to work hard to attract people to its financial services sector, something that has been made harder due to travel restrictions.
Has the pandemic set the island back for talent?
“If we turn the clock back six months, there was quite a few opportunities available in the financial services world,” Crowe said.
“I think the period of stress and the hassle factor of people transitioning to work from home and businesses, such as coping with what the new environment looks like, has probably had an impact on that in terms of some things pausing.
“Obviously this environment doesn’t help when it comes to trying to do interviews or even getting people over here. But we would certainly look at how we bring people over, if they have a contractual right to be here, in the short term.
“There’s probably been an understandable pause on some recruitment in the sector.”
Post-pandemic future
So, what does the future hold of the Isle of Man’s life insurance industry?
“I think the life sector has performed well and they’ve been able to continue their operations,” Crowe said. “And I would hope that people will look on the island in a positive light.”
Pickering added: “Certainly, covid-19 will have a lasting effect on many industries, and the life insurance and wealth management sector will no doubt not only prove resilient but adaptable.
“Going forward, there will be better use of technology, digital signatures will become the norm, and staff will have the option to work more flexibly from home which would further help them to support brokers in different time zones.
“And certainly, more online seminars and broker engagement will become the new norm.
“With a strong track-record and global footprint, we are confident that the Isle of Man’s life insurance and wealth management sector will continue to support its clients in navigating the current situation.”
