Key arguments:
Market pricing cycles are a thing of the past, according to senior industry figures during the annual Leadership Debate in Liverpool last month, chaired by broadcaster and presenter Jonathan Dimbleby.
The panel was in broad agreement that we are not in a prolonged soft market but entering in to the “new normal”.
Seismic change
Grahame Chilton, CEO at Arthur J. Gallagher International, said there has been a “seismic change” due to the amount and type of capital that has flowed into the market. Ratings cycles as we know them will not continue, he said. “Even if we see a series of major cat losses I don’t think we would see the [return of the] cyclical nature of the market we’ve seen before.”
Steve Hearn, deputy CEO at Willis Group, agreed but added that customers need to benefit from this change. “How do we use that capital for the best benefit of our customers? There is further to go on that question.”
“Broker reluctance”
In a lively and wide-ranging debate, the subject of broker business models was addressed by Lesley Harding, vice president and head of insurance risk solutions at BP. While all agreed that greater transparency over costs was needed, Harding argued that brokers can be "very reluctant" to disclose their internal costs and what margin what they get.
UK is “behind the game”
The need for more innovation in the insurance market is a regular theme during the annual debate, but the message was perhaps more stark than previous years with Hearn arguing that the UK has fallen behind internationally – with markets such as Zurich and Munich doing a much better job.
The market is used to change, Inga Beale, CEO of Lloyd’s believes, but it is the “pace of change” it is struggling to keep up with – that and understanding the customer’s needs. Five to six years ago Lloyd’s tried to launch a supply chain product, she said by way of example, but they had no buyers for two years.
In response to a question from the Twitter feed, Seraina Maag, vice president and CEO EMEA at AIG Property Casualty, said that the industry is working with the academic sector to explore new avenues for innovation. For example, AIG is investigating the use of video and wearable technology to improve their ability to analyse data, monitor near-misses and enhance loss adjusting methods. “It’s very exciting…but as an industry we’re just scratching the surface.”
The Panel:
Chair: Jonathan Dimbleby
Inga Beale, CEO, Lloyd’s
Grahame Chilton, CEO, Arthur J. Gallagher International
Lesley Harding, vice president, head of insurance risk solutions, BP
Steve Hearn, deputy CEO, Willis Group
Seraina Maag, vice president and CEO EMEA, AIG Property Casualty
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