On Wednesday 7th September 2016, along with a number of my HFG colleagues, I set off to the Willis building to go and hear what five key individuals within the insurance market had to say about current market trends within reinsurance. Throughout the event however, it was apparent that the Pre-Monte Carlo briefing would prove to be a useful insight into not just the reinsurance market but changing market trends across the industry as a whole.
After the customary croissants, coffees and pleasantries, the talk was opened by the CEO of Willis Towers Watson – John Haley. It was interesting to hear John’s thoughts on not only retaining relationships, but also reaching out to new clients in such a tough market. This was particularly pertinent to us and is an obstacle we have to overcome in the recruitment process on a day to day basis. Service and delivery is imperative to maintaining our reputation and at HFG it is not just about knowing the best thing for your candidate, but about providing consultancy advice and expertise to your client. KYC is a massive obstacle you are required to overcome in all walks of insurance, but one you need to overcome to both retain clients and develop new ones.
Victoria Carter then went on to speak about the threats to the traditional market model, innovation and young talent within the market. The threats to traditional insurance etiquette are becoming more and more apparent each day. The implementation of TOM which is currently being built is a platform that is going to have a significant effect on the market. Whilst on the subject of innovation, Victoria mentioned Uber and Air BnB, with her point being that Uber do not own Taxis and Air BnB do not own properties, yet their platforms provide these services. Victoria asked whether a similar innovation technique possible in the insurance industry? This proved a powerful finale to her speech and left a thought in the heads of everyone in attendance.
The next speakers were Jay Nichols (CEO Axis RE) and Paul Miller (Head of EMEA Insurance, Goldman Sachs). Their talk revolved largely around Joint Ventures and M&A activity in recent times. Although there was clearly a lot of M&A activity in 2015, I was shocked to discover that the MS Amlin deal was in fact the 4th $5 Billion deal to go through in a period as short as 6 months! From the perspective of Goldman Sachs, it was clear that the Lloyd’s market outperforms others with investor interest, including that of the European banks, the US market, FTSE 250 and FTSE 500. With this in mind it is evident that the opportunities for consolidation are vast within this unique industry and Jay went on to clarify this alongside the pressures within the industry. I would have to agree that alongside this, there is the chance to consider joint ventures and the benefits of this rather than a scope/scale merge.
Aon Benfield CEO Eric Anderson was next up and spoke around how a broker can help drive growth. He first made the point that Brokers are aware of where specific business lines will be written, e.g. his example was around wholesale property insurance. He knows as a broker that this is predominantly written out of both London and the US. If Asia however, was to start wanting to write this business the data and analytics that are held within the broking house can not only provide a broking service to the underwriter, but can consult and advise their client with the information already obtained by them. Referring back to Victoria’s innovation point, the technology now on offer is able to provide a client with all of the data and analytics needed to make an informed decision.
Following the four discussions I identified some common themes throughout that are substantial to the Lloyd’s market. Many comparisons were made to the Industrial Age and historic periods and this was a common analogy used throughout. I can see why, with the new digital revolution being apparent, there is the talking point of value chain and transportation of risk, how these change throughout the process and how this needs to improve with market changes – considering physical, environmental and economic changes. This also coincides with the view of Vicky on urbanisation and new risk landscapes alongside the pressing matter of globalisation and technology.
To summarise, the Pre-Monte Carlo Executive Briefing provided a fascinating insight into the future of the Reinsurance market and the difficulties it is currently facing. All in attendance from HFG enjoyed the seminar and would like to thank the speakers and The Insurance Insider for another successful event.
See you in Monte Carlo!