New research by the London & International Insurance Brokers’ Association (LIIBA) has found that trust, personal relationships and human judgement will “remain fundamental” to successful trading in the London insurance market, even as artificial intelligence and data transform how risks are assessed and placed.
The report, aptly named The Trust Imperative, explores what digital trading will mean in practice for the people matching risk with capital across the London market.
Its main focus is on how digital trading can revolutionise client outcomes, while also examining why humans must stay in control.
To compile the research, LIIBA gathered views from its Executive Committee and wider Board, along with digital leaders from member firms, then cross-referenced these perspectives against findings from four workshops involving brokers with fewer than three years’ experience in the market.
“Central to the research findings is the importance of trust. While technology will increasingly perform tasks within the placement and claims process, participants questioned the extent to which firms, trading partners and clients will be willing to allow technology to make decisions independently when reputation and client outcomes are at stake,” LIIBA said.
The research also underscored the enduring importance of human judgement and nuance, particularly when dealing with complex and emerging risks where complete data may not exist.
According to LIIBA, participants identified the ability to make informed decisions without perfect information as a defining characteristic of the London market.
The workshops pointed to significant changes ahead for the role and skill set of the London market broker.
LIIBA suggested that the ability to convert increasingly large volumes of data into usable information could enable more dynamic, real-time risk assessment, moving away from reliance on static annual renewal cycles and supporting the development of more tailored risk solutions and new financial instruments.
LIIBA added, “This will require front-line traders to develop new capabilities, including greater confidence in interpreting data and critically assessing the output generated by AI. Participants highlighted the importance of retaining the expertise necessary to recognise when technology may be providing incomplete or incorrect information.
“Long-term relationships between clients, brokers and insurers can provide the confidence required to take calculated risks, manage the impact of insurance cycles and develop solutions for new and evolving exposures.”
Christopher Croft, Chief Executive of LIIBA, commented, “Digital trading is talked about constantly, but too often the debate starts with the technology rather than with the people who actually trade. We wanted to turn that around and ask brokers, including those who will be trading in this market for decades to come, what a genuinely digital future should look like.
“What came through particularly strongly is that technology cannot be considered separately from trust. Reputation and relationships have underpinned this market for centuries and our research suggests they will remain fundamental to the way business is done, irrespective of how sophisticated the technology becomes.
“The opportunity is therefore not to replace human judgement, but to give traders much better tools with which to exercise it. The future our participants described is one of humans augmented by data.”
Croft continued, “The question for the digital trader should not be what they can do for technology, but what technology can do for them. If we get that relationship right, we have an opportunity to combine the qualities that have made London successful – expertise, relationships, judgement and innovation – with technology capable of providing information at a speed and scale we have never previously had.
“That should ultimately allow brokers and insurers to make better decisions and, most importantly, deliver better outcomes for clients.”
