A view from the future
It is surprising that the London Market still lags behind other markets and industry sectors when it comes to the use of technology, given the nature of the business we are in and how underwriters need to look at trends for their business models.
Having joined Hiscox with no previous work experience, this cumbersome technology wasn’t something I had initially noticed. However, as time has gone by, it has become clear that certain processes in the market are arduous and could be simplified. People are more comfortable using processes they are already accustomed to rather than embracing new ways of working. Change is scary, but in this case necessary.
The London Market has stagnated
Setting the agenda for the future, Steve Hearn recently highlighted to the LMA Young Professionals group how London has been standing still for too long – expecting instead of exploring; sustaining instead of growing. The world and the insurance industry continue to evolve rapidly while the London Market has stagnated, assuming that its global brand will entice new business.
He also went on to emphasise that the cluster that is the London Market has been proportionately shrinking as other global hubs are growing – and growing fast. And although our share of US and Canadian business has remained strong (as it has done historically), emerging market business has declined significantly. There is an increasing demand for insurance in Latin America, Africa and Asia, but we as a market have failed to capitalise on this prospect.
An exciting opportunity coming out of the London Matters report is that of talent and processes.
London faces many other challenges. In 2013, London’s expense ratios had soared 9% higher than any other market, putting us at a competitive disadvantage. Costs are also increased by the strict regulations with which we must comply.
Cause for optimism
There is a powerful case though, for remaining optimistic. An exciting opportunity coming out of the London Matters report is that of talent and processes. The market is full of wonderfully talented people, from underwriters, actuaries, claims handlers and IT specialists. This talent can sometimes be wasted on processes that could be done by someone else or in simpler, more efficient ways. Ensuring that the right people are in the right jobs could help to reduce the cost of doing business.
More experienced and qualified people can take on bigger roles, helping to create new business opportunities for their respective companies, while delegating some of their other tasks to more junior staff. This would be exciting as it would give young professionals the opportunity to take on bigger roles. The prospect of being able to learn more about our business areas and having more underwriting exposure would certainly help with the future development of young professionals in the London Market.
A better brand home and away
The report also talks about better marketing, particularly when it comes to emerging markets. That doesn’t mean though that we don’t have an awareness problem in our established markets. From a personal perspective, my friends outside of work are unaware of the opportunities within the insurance market or Lloyd’s. I’m not entirely surprised, as I couldn’t have claimed to have known a great deal myself before I joined. Insurance is everywhere, so why isn’t the London Market getting the publicity you would expect?
The challenge will be keeping all stakeholders, including young professionals, who after all, are the future of this market, involved and engaged.
Keep the next generation involved
It’s positive that LMA Young Professionals have been involved at this stage, and I’m sure that everyone who went to Steve Hearn’s presentation came away feeling encouraged that change is needed to maintain London’s position as an established market. The challenge will be keeping all stakeholders, including young professionals, who after all, are the future of this market, involved and engaged.
The DNA of capitalism
The former Willis chairman and CEO Joe Plumeri once said that “insurance is the DNA of capitalism.”
Almost everything and everyone around us needs some type of insurance, so let’s take advantage of that. The opportunities that are out there for us as part of the London Market are seemingly endless, but action needs to be taken for us to seize upon them. The ‘London Matters’ report is the first step of many that must be taken to recognise and achieve the change that we need.