Although still a corner-stone of the global insurance market and garnered in history, the London Insurance Market - much like the rest of the Insurance and Financial Services industry - is under pressure to "self-disrupt" and "reimagine it's purpose" or face displacement from lean, agile and digital competition.
The tradition and deep expertise within Lloyd's and the London Market helps to preserve it's position as a global hub for insurance - in particular specialty lines. However, in the same way that machines threaten other experience-based professions, like Law or Medicine, there is increasing pressure on the Insurance industry to rethink it's product, services and engagement model to remain relevant and value adding in the digital era.
It is refreshing to see Lloyd's new CEO John Neal not wasting time in acknowledging the need for change and setting out a vision to make Lloyd's the market of choice for global insurance by differentiating through distribution, access to capital, value and addressing the more complex and immerging risks (e.g. intangible assets).
It has long been acknowledged that insurance is in need of a good shake up and refresh. Products, services and ways of working really haven't changed or progressed over the last half century, certainly not in line with the propensity of business or society fuelled by the high-octane of digital technology.
The Insurance industry has a tradition of innovation, creative problem solving and enabling business or societal growth. I can't help but feel in recent years there has been a focus on squeezing out the returns of the ideas and products of old, at the behest of creating the products and services to meet the current or future.
Neal cites seven priority areas of focus: Distribution, Underwriting, Capital, Data, Service, Product and Growth. I can't argue the merit of each of these seven priorities in terms of adding value in the form of better service, lower cost and improved market reach. However, I would argue that there is only one priority for Lloyd's which applies to the rest of the Insurance industry too... That priority is momentum.
Momentum is a term frequently used amongst the start-up fraternity which symbolises maintaining energy, motion and driving progress. Momentum is fundamental to getting ideas off the ground, driving execution and establishing the energy to really challenge the status quo. Too often corporates or institutions like Lloyd's have vision and understand the problems that need addressing but then don't have the plan, structure and autonomy to execute. Furthermore, for initiatives that get off the ground, more often than not corporates and large institutions confuse motion with momentum and this rapidly results in misdirection, frustration and ultimately stalling.
If Lloyd's - and the whole Insurance market for that matter - is going to deliver tangible outcomes in light of the vision of increasingly digital, customer-centric and disruptive services there has to be momentum. I salute the sentiments and direction that John Neal has set out and now hope that Lloyd's put in place the right resources and partners to create momentum and that there is a focus on agility, rapid decision making and achieving progress rather than seeking perfection or acceptance by committee.
Compelling vision for a renewed Lloyd’s market which would address the issues of distribution, cost and capital that have prompted questions over the past 12 months about its long-term future. It is too far from its customer, that its operating expenses are too high, that it is too slow at paying its claims and that it is not sufficiently differentiated. when the radical nature of the envisioned changes is sketched out and the dependencies are considered alongside the London market’s record of delivering change programmes, it becomes clear that execution will be highly challenging.