'Will Inga Beale’s legacy be adopted by a new Lloyd’s CEO?' - Insurance Day 3rd August 2018

Will Inga Beale’s legacy be adopted by a new Lloyd’s CEO

With a new chief executive expected to take over at the helm of Lloyd’s in 2019, it might be interesting to determine what has changed during Inga Beale reign at the top and which of these changes are likely to progress under the new incumbent. Just because people make changes it doesn’t mean that they necessarily are set in stone for the future.

There is no doubt that whatever has been the master plan, the market itself has landed in a very bad financial position over recent years and no doubt this has reverberated on the bonuses of the Lloyd’s management, hence probably the urgent move to address loss making underwriters asap. The Brexit plans have also been an issue which was probably not expected, but for which Lloyd’s has to hope their scheme will work. 

The two main areas which appear to have been concentrated on are diversity and what appears to be the desire to shoe-horn ‘round’ technology changes into a traditional London market ‘square hole’. While people might baulk at some unattractive solutions to update the market, their bleatings of ‘not for me until it is something I want’ are ignored. From a diversity point of view, it may not have been in the current CEO’s job spec, but it certainly will be this time. 

The foothold of TOM, the name of the reform band wagon, is strong even if much of its deliverables are not entirely what people want - not so much in London but also the global delegated authority users, who might not be bursting to change their methods in a small town in Minnesota to satisfy the perceived efficiencies to be offered by their Lloyd’s carriers.

Banging the head of an LMA member might be easier than the head of a small US broker who has been used to a pleasant local life, broking for his town in the morning, fishing in the afternoon, and sending his completed business to London once a month via an Excel spreadsheet, or worse.  If there is a system in place in London to improve the ‘lot’ of any global user of the London market, then time will be the judge as to it efficiency.

The main area of Lloyd’s – placing - does not insist on any input from the wholesale client. The input of information starts with the London broker. Yet wholesale clients aren’t any different from me and my car insurance. I have to enter all of the information myself. The message should be: ‘If you want to deal with London market start to provide us with your formatted information, otherwise no deal’. Even a little standardised data would help. It won’t happen of course.

In terms of innovation, underwriters in Lloyd’s have often found a useful bit of IT to improve their risk. If other underwriters then copy it well so be it, but the first one there gets the main benefit. Lloyd’s is now planning its own solution for innovation, but this time by endeavoring to help the whole market with the ‘Lloyd’s Lab’, which will enable new concepts and ideas to be tested in a fast-track, fast-fail environment with involvement from the Lloyd’s market participants.

It sounds a bit like a cross between Dragon’s Den and the X Factor. After a ten-week presence in Lloyd’s, a panel made up of Lloyd’s top brass will decide whether to lease the products on offer or invest directly in the organisation. Hopefully the whole market won’t have to pay for something only a few want!

There are, therefore, many activities taking place in the TOM camp. This is almost certainly not an inexpensive project of which PPL, the e-placing system, is its main flag carrier. If the new incumbent sees profitability of the market a big issue as soon as they join, then it is unlikely that the TOM  changes will have a good enough foothold to make this a game changer.

If the market losses are purely cyclical then rates will rise and business will return in 2019 anyway. If other changes in London brought about by the current CEO are in anyway seen to be of negative advantage to London, then they might be dropped or put on hold.

What is certain, I’m sure, is that whoever the new CEO is, the Lloyd’s staff will still have to live with a no drinking policy at lunchtime.