I relish the opportunity to attend a vociferous debate, so I was curious to see what the new London insurance generation feels about innovation, given that it’s currently such a prevalent topic in the Lloyd’s market. The event was a joint venture between LM TOM Innovation, KPMG, NGIN and Market Minds, which promised to be “interactive and fast moving”. What I found was not so much a formal or structured debate, but more of a panel discussion where the participants were asked to provide their differing professional opinions.
That said, the panellists did more often than not disagree with one another. They were an interesting selection of speakers from the Lloyd’s broking and underwriting world, along with three representatives from the ‘provocative’ new realm of InsTech businesses. Given that this was a new generation (i.e. younger person’s insurance event), I really wasn’t expecting to find a clash of the old and new schools of thought. However, surprisingly, the two young underwriters from MS Amlin and XL Catlin both expressed concern that innovation would negatively disrupt the “silos of underwriting expertise” in the market. These views were at odds with the audience, who tended to regard disruption as positive to the underwriting status quo.
The Chair opened the discussion by asking the panel why we should bother to “digitise the marketplace”. It seemed to me that, right from the start, innovation was being conflated with technology, which I feel is a somewhat narrow view of innovation. And indeed, this did seem to lead to an unfolding confusion in the discussion over what exactly innovation entails. Renaud Million, the Founder and Managing Director at Spixii insisted that innovation is not just about making the market more efficient, although ironically that is the aim of his interesting product: http://spixii.ai/.
There was also some tension in the discussion over what innovation might engender; the understandable prevalent anxiety was that machines will replace human labour, and this tended to outweigh its potential for transforming and invigorating the way we do business. It soon became clear that this anxiety also represented a source of resistance to innovation, at least from the underwriting representatives. The underwriters clearly felt that it would be the broking and not the underwriting fraternity that would need to adapt to a digital world.
Among the advocates for innovation were Edward Ventham, a Broker at Digital Risks, alongside Peter Clarke, Founder and Managing Director at Insurercore (http://insurercore.com/), and Patrick Bousfield, a Cyber Reinsurance broker at CapsicumRe. It was particularly engaging to hear their thoughts on where insurance innovation is headed, and also, what it might achieve in the Lloyd’s Market. All these innovators agreed that the key global trend is insurance becoming far more customer-centric … and that London is some way behind the curve on this.
However, despite disagreements, both ‘sides’ found consensus on the point of relationships being a key driver of the Market’s success. To this end, any innovation that could make insurance “quicker, better, and less expensive” would be a welcome development because it would release the potential in the Market for more and better relationships.
Concluding the event was the question of where innovation would come from and whether or not the Market would be capable of growing this talent internally. The verdict was that the Lloyd’s market will need to reassess comprehensively the future value of its human assets.
Overall I found the event to be a revealing insight into the views and attitudes of millennials in the London Market. Often these views are not as straightforward as we are sometimes led to believe. It’ll be interesting to see how the climate of opinion adapts going into 2017, and how the new generation will rise to meet the challenge of change.
Chantal d’Offay, Research Analyst at Gracechurch Consulting