Lloyd’s boss on how brokers can survive the soft market
Lloyd’s CEO Inga Beale says there is ‘enormous opportunity’ for brokers despite the ongoing soft market conditions, and Lloyd’s can help them find it.
In an interview with Insurance Business magazine out this week, Beale said her advice for brokers who want to stand out was straightforward.
“It’s a lot easier to do the same old thing you’ve always done.”
She said recent Lloyd’s research highlighting significant underinsurance in 17 countries showed there was a huge insurance gap around the world.
“To me, that presents an enormous opportunity, and I’d encourage any broker to go out, look for the gaps in insurance coverage right now and seize the opportunity.”
She added: “We’ve conducted research with risk managers of businesses around the world – so this is also true in mature economies – which shows that less than 10% of the risks they face are covered by insurance.
“My encouragement to brokers is to work with us to increase awareness, using the studies Lloyd’s publishes around specific risks.”
Beale said there was considerable room for growth around cyber, especially outside of the US, and more awareness of supply chain exposures was something else Lloyd’s was helping to drive.
“We’ve got a long way to go, I think, for people to really understand their entire supply chain and how something can break somewhere in the world and have a massive knock-on impact elsewhere.
“This is one of the hot topics in Lloyd’s emerging risks list. We’re doing a lot more work to create awareness and understanding around supply chain interconnectivity and risk exposure.”
With climate change another hot topic, and following Lloyd’s launch of its City Risk Index, analysing the risks to 301 major cities from 18 man-made and natural threats over a 10-year period, Beale said windstorms represented the biggest single threat in Asia Pacific.
“It’s a huge issue because it’s a huge threat,” she said.
“Across the region, there’s a potential US$530 billion of GDP at risk over the next 10 years from windstorms and we’ve got to be able to model nat cat threats in Asia Pac as strongly as we can in other parts of the world.
“Modelling – getting granularity around data and exposures – really started in the US following Hurricane Andrew in 1992 because the industry was really caught off-guard, having underestimated exposures by about 50%.
“That led to a huge investment in modelling around windstorms… but as an industry, we haven’t spent anything like as much as we need to in other parts of the world.
“I’d like to see much more spent on understanding those exposures because they’re changing all the time.”