Toby Esser, chairman of AFL Insurance Brokers, on what he’d like to see the incoming market CEO John Neal concentrate on…
Unlikely though it might seem at first glance, but Lloyd’s is more important to the independent small to medium wholesale broker than anybody else.
Whilst the “Big Guys” place more income than anybody else in Lloyd’s, this represents a much smaller percentage of their total global income than most of the rest of us. In a nutshell, Lloyd’s is an extremely important market to brokers such as AFL as we place the majority of our business in Lime Street.
In my view, the independent’s voice not heard enough and it is vital that Lloyd’s moves in the right direction and recognises its importance to independent to wholesale brokers – the incoming CEO could do a lot worse than follow the motto of the famous hamburger chain Hard Rock: “Love All Serve All.”
Clearly to secure the right clients – and therefore good business – into Lloyd’s is a key objective, the Holy Grail; but – to this end and put simply – Lloyd’s as a market is still not efficient and continues to underwrite sub-standard business.
Its future lies in becoming a lot more tech savvy, which in turn will make it more efficient, and there are encouraging signs abound. PPL is at last moving in the right direction and the appointment of Bronek Masojada as its chairman a further good sign. Lloyd’s needs to drive through the mandate for all brokers to use PPL and make this another absolute objective
Secondly, he needs to establish a clear strategy for international distribution which, at the moment, appears pretty muddled for independent brokers.
The policy of opening new offices in different territories looks as if it is being pulled back, and surely the issue is about licences to underwrite business rather than offices and flags – we must ensure that we have these in place in territories where Lloyd’s isn’t as strong as it could be, for example Latin America.
The Lloyd’s model must be right for the future and concentrate on wholesale and specialty – not become more directly involved retail and personal lines which would be disastrous. It also needs to take into account looking at its distribution chain, in particular accessing MGAs.
So what skills and priorities does John Neal need to bring to bear? A thorny question! To my mind, there has for far too long been a convergence and clash between the Lloyd’s Chairman and CEO which clearly has been a hindrance to both roles. Lloyd’s needs a doer and somebody who understands technology and can manage change; in other words, a person who can input the right technology, to ensure that the necessary and correct changes are made, to improve and uplift the business the market underwrites.
It will take a bit of a politician, not necessarily an entrepreneur – and certainly not a typical CEO who might lean towards the dictatorial side. Lloyd’s needs someone who is adept at bringing people together, not someone who is just interested in owning the P&L but a person who gets technology – and really gets that this is a people market. Ultimately, the new Lloyd’s CEO also needs to be someone who is used to change management, who is qualified at looking at cost and creating efficiency, and not necessarily from the inside – but certainly someone with a very intimate knowledge of the insurance market. Good luck, John!