Clearly, pockets of the insurance market are having a turbulent time, the likes of which we haven’t seen since the 1990s, so for many of the younger workers in the industry, this is the first time they have been in a market of this nature and the challenges it brings.
Capacity is certainly an issue that is continuing to challenge. We have seen a spate of insurers pull out of major lines with aviation, marine, property and real estate some of the lines that have been affected by a reduction in underwriters.
Coupled with this, rates are increasing in many lines, aviation would again be as example, which is likely to continue to increase following the recent developments in the sector. Likewise marine is also starting to creep up.
We’ve even seen the disappearance of businesses, most recently Neon, and I suspect we will see more of the same as we navigate the choppy waters.
Our role as brokers in the current conditions is ever more important. Giving suitable advice and ensuring the right cover for the client is in place whilst managing conversations on cost is paramount. Good brokers add value by working with their clients to help them better understand the challenges and manage existing and emerging risks facing their businesses.
Positively M&A continues to be a theme. From our perspective, last week we announced we have increased our ownership of Capsicum Re to 100%. Capsicum Re is a fantastic business built by Grahame Chilton, Rupert Swallow and the team. It started in just 2013 and has grown rapidly to become one of the largest reinsurance brokers. I am looking forward to working more closely with our new 150 colleagues for the benefit of our respective clients.
Finally, in just a few weeks, the next phase of the Lloyds reforms will be announced, and we will have more understanding of the modernisation plans and the use of technology to help drive efficiency, whilst maximising the skill and talent of the people involved in placing business in Lloyds.
It’s going to be an interesting year…more to follow as the year unfolds.