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The Covid-19 pandemic changed the way many businesses operated – almost overnight. As we begin to emerge from the pandemic, Ben Bolton, founder and managing director of Gracechurch, discusses the major trends we can expect to see playing out in the London Market over the coming months.
Over to Ben…
Reflecting through the lens of our data on the last two years, leads me to four predictions for how our Market will begin to reshape as we move out of the Covid-19 pandemic:
#1 The Market will now modernise at a rapid pace:
The pandemic has shown that creativity and ideas happen in person, not on video calls. The pent-up desire to do things better will unleash huge creative and competitive forces, transforming the industry, bringing innovation and (I hope) efficiency.
#2 The winners will be those who use digital to enable human innovation:
The digital domain is no longer ‘the great unknown.’ The pandemic illustrated that we can do some things faster and more efficiently without having to traipse into the office every day. In our London e-Trading study, 83% of respondents said that they expect e-Trading to be the norm for all broking within 18 months. The point is that this will release time and space for talented people to develop new and better ways of doing things to grow the market and gain competitive edge.
#3 Only scale and specialist plays will matter:
Our research has shown an increasing share of business flowing to the largest carriers, a trend that shows no sign of stopping. At the same time a new breed of portfolio plays and ’boutique’ specialists who really know their classes of business and deliver added value to the customer will thrive, both in terms of profitable risk selection and also in terms of building valuable business partnerships.
#4 The Lloyd’s Room will be repurposed:
We tracked the increasing shift away from trading at the Box for at least five years pre-Covid. The main raison d’etre of the Room had become to enable the clearing of smaller, straightforward risks efficiently. Many insurers were also under the illusion that presence in the Lloyd’s building helped their brand, but there was zero brand take-out from Lloyd’s transactions. So, we will see the simple stuff move to digital platforms, while more complex, high value business will be broked in purpose-designed ‘trading spaces.’ These will offer privacy, areas that encourage collaboration, working facilities and will be environments where businesses can market their innovative products and services.
All these trends – and more that I will discuss in future – are essentially accelerated versions of what was already happening and reflect an industry that is modernising fast. It’s exciting, but the market must focus on getting compelling brand stories out and attracting the best talent to make the most of these opportunities.
Gracechurch is the commercial insurance market customer reputation and research specialist.
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