The Future of the London Market: March 2022 Airmic Survey
For an industry not typically celebrated for its agility, insurers can be proud of the way they have adapted during the pandemic. Without bolder strides towards digital and talent transformation, however, the legacy systems of the London Market, risk the loss of business to more modern competitors
This is the conclusion of Airmic’s latest Pulse Survey, conducted among the Airmic leadership group of risk professionals between 3 and 11 March. Its title The Harsh Market: Moving Forward Together: The Future of the London Market reflects the close relationship that continues between Airmic members and the insurance market.
The survey found that:
- The pace of market hardening has slowed since late 2021, but many fear that market conditions could deteriorate. Reduced insurer capacity remains a problem for many.
- Premium rates for cyber risks have skyrocketed. Increases of 100% are common. A tenth of respondents reported rate rises of more than 400%.
- Insurer and broker satisfaction levels are improving, in line with signs of ‘green shoots’ in the market.
- Lack of collaboration among insurers and insufficient understanding of technology by insurance decision-makers are seen as the biggest obstacles to improving the market’s infrastructure.
- Increasing diversity of thought created by attracting additional talent, especially from other industries, and digitalisation will be key to alleviating the inefficiencies in the London Market faced by Airmic members.
Airmic concludes that the insurance industry needs to shift its focus from protection to prevention. New technologies, such as artificial intelligence and machine learning, will be key to reducing costs and creating value for all parties.
Silos between ‘risk’ and ‘insurance’ are being dismantled. But the insurance industry still needs to respond in a more connected way, the survey indicates. This is crucial in the face of climate change, which is expected to cause a seismic shift in losses.
“The insurance industry, risk professionals and government need to collaborate and move forward together,” the report concludes.