The passing of time and growing strength aren’t always compatible, but last week a consortium of 28 leading London market insurance organisations including; underwriters, brokers and Lloyd’s London, reported on how it tested the market impact for a chain of events with incurring costs at least four times larger than the 9/11 World Trade Center insured loss.
This scenario was a mammoth combination of a highly destructive hurricane, an unprecedented cyber-attack, a large stock market decline, and major re-insurer default, all occurring in quick succession.
A severe test for an old and some say past it’s best insurance market. However, the results seem to show that the London market would be able to survive events incurring cumulative insured losses of $200bn.
Not bad for the old age pensioner of the insurance world at over 300 years old!
This exercise was not imposed by a regulator, but an industry-led approach done with the assistance of the Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and HM Treasury.
And it’s what makes the London market so special.
With this white paper I was again reminded of how completely different insurance in London is to any other industry sector I’ve worked in. So strong are the ties, relationships and everyday proximity make the very fabric of the insurance market and it is interwoven with the willingness and trust of people in doing business together.
What has kept Lloyd’s going for so long and what keeps it so strong?
To put this into context, England was in turmoil when Lloyd’s was formed in 1688; James II was fleeing toFrance; and William of Orange was entering London to take the crown as our Protestant king, only 30 years after the death of Oliver Cromwell and less than 20 years after the Great Fire of London. Now that’s a lot happening in 30 years, and not many in the London market can even claim that sort of rollercoaster ride!
Lloyd’s has seen it all, from the creation of an English constitutional monarchy to Brexit. And from the discoveries of Sir Isaac Newton to the entrepreneurial spirit of Elon Musk space planning to colonise Mars, Lloyd’s and the people of the London market have encountered every type of event, including those unimaginable just a few years before.
Nonetheless, it’s not what has made Lloyd’s survive for three centuries that counts or what intrigues me; it’s what makes Lloyd’s relevant today. The same goes for the people that work there and in the London market generally.
In my business – recruitment – there are two sides to the coin: the client having the business and trade to create opportunity; and the candidates having the right skills to fill those openings and seeking the challenge they pose.
Lloyd’s with all its moving parts is a unique entity steeped in history and tradition, yet it always has one eye on the future, striving to stay relevant and often a place of contradiction – championing the new wave of InsurTech solutions but were you’re not allowed onto the underwriting floor without ties and jackets.
Quirks aside, what about you? Are you keeping an eye on the future? What makes you or your company relevant?
Keeping yourself relevant is not the same as being current. Jumping onto a blog, LinkedIn or Twitter doesn’t make you relevant, even if you’re Donald Trump.
It doesn’t matter if you’re a baby boomer, Generation X or Y, you have to keep up the pace, change, innovate and adapt. If Edward Lloyd had stuck to serving coffee would you be reading this?
So what of your progress? The journey from serving coffee to becoming a global hub of specialty insurance didn’t happen overnight, and I’m sure there wasn’t a grand plan for much of it, but what about the change, diversity and growth in your personal career plans?
“Expect the unexpected” is the new mantra for business leaders around the world, according to PwC, but what does that mean to you?
Being relevant is key to your career. Attaining the confidence that what you can do and achieve will make you marketable is what you should strive for.
Perhaps in a Post Brexit world exercises such as this stress test are essential for London to maintain and evolve its position as the global pre-eminent centre of insurance expertise.
Aon broking president, Karl Hennessy, said: “This dry run is a demonstration of the London market’s unique value proposition; namely the ability to bring together specialist underwriters, brokers, claims and other professionals to serve our clients at the time of their greatest need and beyond.
So the wisdom that comes with age and the strength that comes from experience has put the London insurance market in an advantageous place but it needs to keep moving forward but remaining true to what has made it and Lloyd’s of London so special for over 300 years.
Written by Stewart Taylor.