As there haven’t been a huge number of major loss incidents, nor significant amounts of potentially industry changing news in the first month of 2017, I have been reflecting on the conversations I have had with Clients, Colleagues, and Candidates in and around the London Market. It should be noted that my network is diverse, and I have been talking with C-suite professionals from the Lloyd’s market, senior reinsurance executives, InsurTech CEOs, graduates, London market brokers underwriters and claims professionals, consultants, software developers, etc. etc. on any number of topics relating to the development and enhancement of their businesses, as well as career options and new ideas.
I have drawn a couple of conclusions, backed up with my experiences gained over nearly 20 years in and around the London Market, and a lifetime hearing about insurance as a result of my father’s extensive career at one of the world’s largest broking firms.
Before expanding on my thoughts, I’ll mention again that I love this market! I really believe in the value of insurance, and within the square mile there are some of the most professional, insightful, and conscientious people you could ever hope to meet.
So what does the market need, and more importantly: why?
Firstly, I think it fair to say that incumbent insurers and brokers need to look past the profits and stability they have experienced for an extended period (for any nay-sayers on this point, look back to what happened when there was a global financial crisis and the minimal impact this had on the insurance sector), and realise that outside of the confines of EC3, people really have a dim view of the market. Although it’s unlikely you’ll actually hear someone say it, a large swathe of the market will think: ‘So What!? So long as we turn a profit and fulfil our obligations to our shareholders we’re doing our jobs…’ This needs to change. Customers are becoming better connected, better educated, and better served in every aspect of both their personal and professional lives. If they don’t like the way things are done, they will find an alternative solution, and increasingly we are seeing individuals try to solve their own issues by taking a risk and setting up their own challenger operation.
It is not the role of the customer to improve their view of Insurers, it is the obligation of the market to enhance their image to meet expectations in the digital age.
This doesn’t mean I think every business should suddenly become completely digitised, and optimised in every part of their business; binning off outdated functions and pasting over legacy issues. But we should all take responsibility for how we are perceived and share the burden of raising the bar from where the mainstream media has driven it down to.
Additionally, the industry needs to do more to encourage a diverse mix of skills and perspectives in to the sector. There exist many laudable and worthwhile diversity and inclusion programmes in the market, but they aren’t tackling the root cause of why the talent goes elsewhere. When speaking to a talented and enthusiastic young broker recently, she advised me that in a recent review she was effectively told to rein in her enthusiasm and settle in to the role that she was given. Her desire to innovate, do a better job for her Clients, develop a deeper understanding of the market, and ultimately make an impact, was quashed by people - both internally and externally - who are more interested in maintaining the status quo than encouraging independent thinking. Until the market as a whole stops regurgitating carbon copies of the people that have gone before and accepts that to get different skills it needs to act differently, as a whole it moves ever closer to irrelevance.
Whilst there are a number of other things that warrant debate, I’d like to finish on the subject of innovation. There are an increasing number of companies who are bucking the trend on this, but most still need to realise that developing new products is not true innovation, that is simply their job. Innovation should come through identifying and developing new market segments – and by new I mean, for example, getting insurance to people who don’t even realise they are at risk. Innovation should continually add more value to the customer, not just when they buy their insurance, but throughout the life of their relationship with their risk transfer partner. Engagement must be continuous, not annual and at pain points such as when paying a premium or making a claim.
I’d like the above to be viewed as a call to action rather than an attack on the market. There is so much potential waiting to be released, but waiting for a catalyst won’t get us there. Just do it!