London cannot necessarily compete with the emerging hubs on every level. Instead, the market should focus on fostering entrepreneurialism, building strong relationships and customer service.
By Rupert Swallow, CEO of Capsicum Re
The London Market Group and BCG’s recent report about the future of the London market has been the subject of much discussion and debate. Concerns have been raised about the competitiveness of our market and whether, in face of rapid growth from emerging markets, it can retain its position as the undisputed global hub for commercial insurance. The report questions London’s relevance but I believe that innovation, entrepreneurialism and strong relationships – the foundations upon which our market was built – continue to remain its strengths and competitive differentiators. It is our job to promote these characteristics to aid the evolution of the market in order for it to remain relevant.
It is natural that the emerging markets are growing at a faster pace than London but Lloyd’s 300 year head start is advantageous for the London market’s future preservation. London’s reputation is tied up in its history, during which it has weathered storms that threatened its stability but from which it emerged stronger than ever. Over its lifetime the London market has witnessed the birth of insurance and harboured a wealth of experience that has been paramount in creating innovative products that mark Lloyd’s and London as the hub of specialty underwriting.
This in turn has served to make the insurance industry an attractive career. There are 34,000 insurance professionals employed in London and most are working within the Square Mile ensuring a consolation of expertise within a relatively small area. London is a global centre of excellence and we need to empower the talent to identify emerging risks and develop products that fulfil our customers’ requirements. Additionally the London market is embedded in the City of London, which is home to a wealth of advisors that support the insurance industry making it easy to conduct business. This proximity and ease of access aids the creation of strong relationships, as face to face meetings are the norm, rather than in other regions where clients, markets and advisors are spread throughout the country and operate on different time zones.
We cannot necessarily compete with the emerging hubs on every level so we should focus on being a hub synonymous for strong relationships and customer service supported by true advocates of the industry. Insurance practitioners exploit the wealth of knowledge within Lloyd’s and the surrounding City of London to develop relationships that go beyond expectations. London’s competitive edge will be its association with building in-depth, holistic relationships with its customers. We need to surpass expectations of customer service and integrate ourselves with our customers to truly understand not just their (re)insurance objectives but their strategic ambitions for their business. Our role should be more than stewardship although that is an important value for any intermediary and we need to accompany them throughout that journey and help mould their future.
The combination of talent and focus on long-term relationships leads to the creation of products that push the boundaries of innovation, empowering brokers and underwriters to advocate their customers’ requirements and deploy successful negotiations skills to offer customers a real alternative.
I believe that those of us who practice our trade in London need to focus our efforts on promoting the strengths of the London market. London is the only genuinely global insurance market: the concentration of talent is unparalleled, its history and longevity is unique and it is well placed geographically to attract business. These attributes empower people to build strong relationships that make the London market the powerhouse that it is and we need to focus on advocating our strengths on the global stage to reinforce the market’s unique role in the insurance sector.
For those who are fleet of foot, innovative and entrepreneurial then London continues to offer a unique environment for us to express ourselves.
This article first appeared in the 18 May 2015 edition of Insurance Day