Unsurprisingly, Covid-19 has had a profound impact on the financial services sector, shining a spotlight on the insurance industry and its response to the pandemic. As even the most agile companies scramble to rebuild and future-proof their business models, the world’s oldest insurance market, Lloyd’s of London, find themselves on the brink of digital transformation, faced with the following questions: First, how can we work remotely when face-to-face interaction is at the heart of our ecosystem? Second, now that technology has globally widened the talent pool, how can we expand our search to attract diversity, innovation and digital agility? Elements that are fundamental to survive in today’s era of continuous disruption.
Lloyd’s have already begun reimagining what their future will look like by speeding up plans to trial a part-virtual underwriting room. A component of ‘The Future at Lloyd’s Blueprint One’ initiative , “this online environment will combine the best features of 1 Lime Street with digital technology to create efficient, smart and collaborative ways of doing business” said Lloyd’s CEO John Neal . Combining the physical underwriting room with a virtual counterpart opens the possibility of connecting brokers and underwriters at anytime, anywhere. Deviating from a solely physical trading floor would not only help to reduce high costs of doing business at Lloyd’s but allow for new relationships to grow between brokers, ensuring the best and most suitable placement of their clients’ risks.
The removal of location as a restrictor provides the opportunity to source talent globally, not just from within London. Despite London being a global tech hub, a recent edition of the LMG’s (London Market Group) London Matters report found that “the London Market has fewer employees with digital and analytics skills compared to other sectors” . In a recent study, which analysed whether there is a correlation between business performance and the presence of digital and analytics talent, McKinsey & Company found that “among a small subsample of UK insurance companies, the greater the proportion of digital talent a company has, the more profitable it is” . And so, if it can be said that those who embrace technology will benefit financially, expanding the search for a more diverse group of talent could help to bridge the skills gap and increase future profitability in the market.
Providing the right training to develop the existing workforce whilst also adding new analytical skills into “the London Market could improve prospects for its current workforce, and at the same time, make the market more resilient to the forthcoming challenges it will undoubtedly face” . It is no secret that a key challenge already facing Lloyd’s is attracting a younger generation into an aging industry. Speaking to an audience at AM Best’s annual Insurance Market Briefing, Lloyd’s CEO John Neal stated that “only 4% of younger job applicants are actually seeking employment in the insurance industry” . As Lloyd’s is seen to embrace the opportunities that technology brings with market-wide digitisation, its uptake of new and cutting-edge technology has the potential to not only improve the abilities of the existing workforce and open up opportunities to global tech-talent, but also attract a younger generation of tech-savvy leaders into the market.
In an age of unpredictability, it is crucial to proactively navigate change, rather than be directed by it. While Lloyd’s first female CEO, Inga Beale laid the foundation for digital uptake in the market, it has taken the pandemic to kick-start the long-awaited technological revolution. The widening talent pool that technology brings, levels the playing field for more diversity and inclusion to flow into the market. The onus now will be on nurturing that change to shape the future of the industry and pave the way for the next generation of leaders. By taking the reins and opening its doors to the digitally agile and, in turn, exposing the exciting tech opportunities that exist in the sector to a younger audience, Lloyd’s can position themselves at the forefront of market-wide change. Change that is no longer optional but essential.