Insurance Insider London Market Conference Round Up
The best-attended and the most thought-provoking strategic event for (re)insurance professionals, executives and advisers involved with the London market was back on the 24th of November 2021.
It was the physical return of the Insurance Insider’s annual flagship event, the London Market Conference, which took place at 133 Houndsditch, London EC3A 7BX.
DOCOsoft attended as a sponsor and exhibitor on the day. It was fun catching up with old friends and colleagues in a face to face setting. It was also the perfect opportunity for DOCOsoft to show off its brand refresh taking the business into 2022 with renewed clarity and purpose.
According to the conference organisers, the London market is at a crossroads, facing once-in-a-lifetime choices in the aftermath of Covid-19 and how the last 18 months has not only accelerated existing changes but also raised critical new questions. Now is the time to reimagine the London market, post-pandemic was the conference theme.
This year’s conference combined practical insights from industry experts and market practitioners, to provide clarity on a range of challenges and opportunities impacting the London market, while heralding a time of change for the industry.
Systemic Risk and ESG
Bronek Masojada, the outgoing CEO at Hiscox, kicked off proceedings by explaining how companies like CFC are doing huge progressive things digitally. He said that the big challenges that are focusing today’s best insurance minds are digitalization, systemic risk, and the push to become climate neutral by 2050, which is being mandated into law. Climate change and ESG was a prominent theme considering the extinction rebellion protests that took place outside the venue on the day.
In the early morning Market Outlook session, Adrian Cox from Beazley was positive about the specialty markets but had concerns over the ability of systems – or robots - to do things better than people when making underwriting decisions. He also explored the subject of the potential use of technology to model climate change.
The long term – or even short term – sustainability of the current hard market, the growing recognition of the importance of captive insurance structures, and the elephant in the room – ESG – were all major points of discussion at the opening morning session.
Justin Balcombe, L.E.K. Consulting, acknowledged that the shortage of skills is a big issue facing the industry while Elke Vagenende from AIG was optimistic that the value of insurance is no longer questioned as far as multinationals are concerned. The importance of the client interface needed to be stressed and the industry needs to react to the increased demand for captive solutions. Vagenende also mentioned that there is appetite for new intangible risk solutions.
Dominic Hoare from Munich Re stressed the need to look forward with data. Andy Bugoli from the broker Howden unsurprisingly emphasised that the risk counterparties are not going to solve a complex risk just by having the insured client and an underwriter in the same room – you need a broker!
Future of Broking
In the future of broking session, Jason Howard from Acrisure International commented that there is $2.5 trillion of capital looking to invest in the insurance industry and that his business had just invested $400 million into an AI company. Martin Emkes from Gallagher noted that significant M&A is taking place in the sector, which is probably not major news to anyone who reads Insurance Insider on a regular basis!
Future of Lloyd’s
There was general agreement and amusement in the Future at Lloyd’s Panel that we are still talking about data standards 30 years on. Sheila Cameron from the LMA and Bob James who is leading transformation at Lloyd’s were both excited by the prospect that our market could enter data once with all participants being able to share it. Cameron said that the Data Council will be essential for the Future at Lloyd’s project. But we need to work together as a market to deliver. James noted that a phased approach to transformation is the best strategy, and that we don’t need to roll out perfection on day one - patience is key
Risk Management Challenges
During the panel discussion on risk management challenges ahead, the speakers, which included Julian Enoizi, CEO Pool Re and Stuart McMurdo, CEO Property Casualty at SCOR, agreed that there has been too much focus on the pandemic, and we need as an industry to get back to work on other risk management challenges. Enoizi said that all the things that insurers do add value to a public private partnership. Risk managers must mitigate, model, assess, minimise, manage, and then transfer risk.
No-one has a big enough balance sheet without government involvement to cope with even one systemic risk let alone a combination. The challenge is to get insureds to pay for the cover they need, and the solution will be risk management as opposed to risk transfer. The insurance sector must bring in people from other industries to help insurers understand how to predict events.
In the panel session on shaping the future of the start-up landscape, Mark Wheeler Co-CEO Mosaic revealed that the company is on a mission to take a great syndicated product around the world. Richard Watson, CEO at Inigo, does not necessarily want to innovate but instead get things right and have a customer focus. He outlined that he is very pro-London and Lloyd’s. All the panelists tended to agree that there are very few new products being offered. Most start-ups are just trying to do what has already been done – but better.
Is Insurance Losing Relevance?
David Howden, Howden CEO and Founder and Richard Watson concluded the day with a cosy fireside chat. During an enjoyable conversation, the duo agreed that there is a need for currently uninsured risk to be insured, however Howden was sceptical about the ability of start-ups to develop genuinely new products and fears that insurance is losing relevance.
There are lots of areas of risk transfer that insurance is not involved in e.g. securitising carbon off-sets that sit on balance sheets. Howden now owns a £2.5 billion MGA business – through Dual – so he was unsurprisingly convinced that MGAs are the future despite some new start-ups like Inigo. The last comment was that insurance is being overtaken by other markets. For example, carriers must compete better against the derivatives market, which, from a much later start is now twice the size of the global insurance industry, coming in at a whopping $14 trillion.