Lloyd’s and London market insurers will be deploying a number of strategies to ensure disruption to trade with the European Union is minimised post-Brexit, against a backdrop of huge uncertainty over future access to the EU market.
Facilities and distribution
Broker Facilities, where risks are automatically placed by brokers with a pre-selected pool of insurers, have been the most significant and controversial development the London insurance market has witnessed in recent years. Facilities such as Aon Client Treaty and Willis Global 360 have represented a significant change in the evolution of the insurance distribution chain. Alongside these developments, the emergence of consortia and growth in managing general agents has also represented a shift from traditional product distribution methods.
Pricing in London and most international re/insurance markets has been at the softer end of the cycle for some time. Pricing pressure has now diminished margins to such an extent that profitability is under significant threat. Competition is at its most intense in many of the classes in which the London market specialises, such as energy, aviation and property treaty. The focus on disciplined underwriting is mounting at Lloyd’s, where the Corporation has vowed to take all the steps necessary to ensure underperforming business is addressed
Cyber is the fastest growing class of business in the London market, but underlying cyber risks impact all classes. The market faces the dual challenge of seizing the growth opportunities presented while also effectively managing its exposures.
London is defending its competitive position through the Target Operating Model programme as it aims to complete the development of an electronic trading platform, alongside addressing challenges such as data capture and the need to addresses gaps in its talent and skill base.
Growth and innovation
Innovation is critical to the future growth of re/insurers across all key markets, amid an evolving risk landscape which requires the development of new products and risk solutions.
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