As we have come to expect, the Gracechurch London’s Leading Underwriters Report has been met with much hype but also some controversy. The question some have posed is whether it’s merely a popularity contest more to do with what some might call the “cult of the underwriter” than talent. But before slipping into assumption, a closer look at the data and what it reveals about the London Market is paramount.
In addition to raw votes, Gracechurch received over 1450 comments about each of the nominated underwriters, from both underwriters and brokers. A very different story manifests when analysing broker versus underwriter commentary.
Looking at just the Top 10 underwriters in each class, brokers overwhelmingly favoured those underwriters who they consider to have the expertise and experience, but who are also client-focused. Conversely, underwriters nominated fellow underwriters who displayed commerciality, have strong leadership and expertise. Expertise was the only attribute which ranked in the top three most mentioned attributes for both brokers and underwriters.
Far from popularity, brokers nominated those who have the expertise and experience, which is to say, those with longstanding exposure to the market and know what they are doing. But crucially, the tipping point is that these underwriters are able to bring their understanding of the market to client interactions. It’s easy for brokers and insurance buyers to trust someone who’s done it many times before and can act knowledgeably on that basis, which is why client-focused tops as the third most frequently mentioned leading underwriter attribute among brokers.
But a very different picture emerges when looking at the highest mentioned attributes among voting underwriters. Here commerciality places first, showing that for underwriters, London’s Leading Underwriters are those who can balance books and clients. This is a far cry from meeting up down at the pub, and it is somewhat damaging that there’s still the perception that this is what underwriters (especially Lloyd’s) rely on most. The data says otherwise. So, in what is a survey with a seemingly individualistic look at the market, it is in fact revealed that those who lead do so because they consider business and client needs. But these are underwriters who carry a book of business and a team: leadership comes out as the 2nd most cited underwriter characteristic by underwriters. They are respected by their peers because they set an example and their breadth of expertise allows them to do so. It’s evident therefore, that underwriters don’t nominate their peers on the basis of friendship or status.
Clearly the data is disparate when comparing broker nominations to underwriter nominations, and what it tells us is that brokers and underwriters value different traits. It should be no surprise that underwriters’ priorities are not always neatly aligned with what brokers need.
Despite these differences, there is one factor that unites underwriters and brokers. This is, as one commentator pointed out, that the London Market tends heavily to favour Lloyd’s markets. The rankings clearly indicate a predisposition towards the Lloyd’s model. In total, 87% of underwriter votes favoured Lloyd’s markets versus 79% of broker votes. Although underwriters’ favourability of Lloyd’s markets is higher, the large majority of both underwriters and brokers favour Lloyd’s underwriters.
Of course, it’s very much up for debate as to whether this model will persist, and we are looking further into why exactly Lloyd’s underwriters do so well in the LLU nominations. But even as technology continues its advance into the industry, the type of personal relationships that characterise Lloyd’s underwriters are not going out of fashion. Once again, the research reveals that the London insurance marketplace is not just about cost, product, or popularity: the underwriters have real value for brokers.
The $64,000 dollar question though, is how will this change and develop in future? We are working on that as a priority.