Chasing loss making business out of the specialist Lloyd’s of London insurance and reinsurance marketplace might be tough and lead to pain for some, but it is “absolutely right” that the market becomes sustainably competitive for the future, according to Lloyd’s Chairman, Bruce Carnegie-Brown.
Addressing an audience today in the Old Library at the Lloyd’s of London headquarters, Carnegie-Brown discussed the future of Lloyd’s, against the backdrop of challenges such as Brexit, high expenses, the rise of advanced technology, and also the growing influence of non-traditional capacity.
During the soft reinsurance market cycle, Lloyd’s saw its performance struggle as competition intensified while the cost of doing business at the marketplace remained high, leading to stress across the market reflected in underwriting losses.
In response to a need to modernise and adjust to the changing risk landscape, Lloyd’s has targeted loss making business in recent times, and Carnegie-Brown underlined that despite actions such as this leading to job losses and other pains, discipline across the marketplace is incredibly important.
“I regret that, but I think it is absolutely right that we try to make this market sustainably competitive for the future, and that’s the only way to preserve the opportunities for those who remain in the market and indeed, begin to grow the market again.
“And, I think the fundamentals of discipline in everything we do are incredibly important,” said Carnegie-Brown.
Lloyd’s is the oldest insurance market in the world and remains a global hub for insurance and reinsurance business, but with costs so high and competition from other parts of the world growing, the market has started to attempt to tackle the issues it faces.
But while chasing loss making business out of the market suggest a smaller Lloyd’s, which is expected in 2019 due to lower stamp capacity across many syndicates, the market’s Chairman stressed that Lloyd’s always has been and remains open to all forms of capital and innovative ideas, and a smaller market isn’t the agenda for Lloyd’s.
“But I have to say it is not the strategy at Lloyd’s to be shrinking into the future, we absolutely want to be growing into the future,” said Carnegie-Brown.
“I think the future is actually pretty exciting, we just have to seize it and be enthusiastic about it,” he concluded.
At the same time as Lloyd’s is chasing out loss making business, a number of market players have pulled back from certain parts of the market in recent times in light of returns failing to meet the risk being assumed.
The need to cut costs is very important for Lloyd’s as well, and this was something noted by Carnegie-Brown, who underlined the rise of technology as the industry’s friend when looking to improve efficiency.
