When Christopher Croft came into his new role as chief executive of the London & International Insurance Brokers' Association (LIIBA) nearly three years ago, he had big – or at the very least, well-used – shoes to fill considering that his predecessor had the job for 36 years before him. With a determination to represent the voice of the broker in market discussions as well as conversations with governments and regulators, and let LIIBA members concentrate on what they do best, which is servicing clients and running successful businesses, Croft has presided over a gradual evolution in the association during a period that is proving to be tumultuous. The litany of challenges facing the global centre of insurance today includes rumblings at Lloyd’s of London and the fate of Brexit, among other transformations affecting the business operations of insurers around the world.
“I never saw in my coming into LIIBA that there was a requirement for revolution, but I think we have evolved LIIBA over the three years into a more prominent organization, particularly in its relationship with government,” says Croft, highlighting Brexit as a major focus for the association. “There’s nothing like a crisis of uncertainty to make people value their trade associations.”
Croft’s previous positions primed him to face a room full of government representatives and regulators. Before taking a seat of the helm of LIIBA, Croft worked for the London Market Group (LMG), a central body representing specialist commercial insurance and reinsurance broking and underwriting communities in the city, where he was responsible for the first London Matters report released in 2014 that collected data on London’s position in the global insurance industry, alongside other projects he took on during his tenure. Prior to that, Croft spent a decade in financial services regulation and right at the beginning of his career, he found himself out of university privatizing rail systems – a job that put him on track for working with government stakeholders.
An achievement 30 years in the making
Looking back on his career, a key milestone for Croft has also been the common thread between his life at LMG and LIIBA, which was the launch of the Placing Platform Limited (PPL) that gives brokers and insurers the power to quote, negotiate, bind and endorse business digitally. While at LMG, Croft was the person who actually filled out the form to incorporate PPL and in his first year at LIIBA, the association signed a contract with a software supplier and secured the commitment of board members to contribute financially to the project.
“PPL adoption is absolutely something that we view as a success at the moment. We have now 60 brokers signed up, [a jump from] 28 at the beginning of the year, so we’ve more than doubled the number on the platform,” explains Croft, adding that the technology opens doors for brokers and the insurance market after three decades of discussions about implementing something like this. “Lots of people talk lyrically about artificial intelligence and big data, and how these things may come and revolutionize insurance. I’m sure there is the potential for that to happen, but that could only happen if the market actually started using computers to support its main transactions, and PPL is achieving that.”
Besides working on market adoption of PPL to make London an easier place to do business, LIIBA’s other priorities for 2018 that will continue to be top of mind for the coming year involve working with members and the Financial Conduct Authority on the Broker Market Study as its finalization draws closer, and underscoring the need for contract continuity in light of the UK’s pending divorce from the European Union.
“Our primary work on Brexit all the way through is to try and drive to a certain model that would allow EU clients still to be able to access that expertise and capacity in London so that they can still access the insurance they need,” says Croft.
Broker of the future
No one can predict how Brexit will play out, just as it’s difficult to say with certainty what the broker’s role will entail in 10 or 20 years, especially as technological change and new distribution models come into play. However, Croft believes it’s a mistake to think about the broker solely in terms of what’s happening in insurance right now.
“We live in a capital market where we have people on one end who have a demand for capital to help mitigate their risks and they want to be able to access that capital in certain circumstances. We have capital providers on the other end who want to be able to use their capital to provide that support, and also potentially make a return on it,” comments Croft. “At the moment, that matching of demand and supply is done by a broker and an underwriter having a conversation in London and drawing up an insurance policy, but that doesn’t necessarily mean that’s the way it’s always going to happen.”
AI, data analytics, and robotics might change the way that conversation happens, and that’s already becoming evident in some of the developments that LIIBA’s members have witnessed firsthand, where those brokers with more access to data have in turn become better at pricing risk than underwriters, according to the insurance leader.
“What I see is a development of the way that the demand and supply for capital to mitigate risk will evolve, but there will always be a need for someone to act as the agent for the client because what our members do goes far beyond a simple insurance service,” he says. “Where they go and have conversations with clients, it is about establishing the full extent of the client’s risk exposure and then advising them how best to mitigate that, and an insurance purchase will only be part of the program.”
Croft points to a whole suite of other services that brokers bring their clients, including pinpointing their insurance needs and providing expert insurance-placing capabilities – critical today when it’s not atypical to see global programs accessing multi-billion dollar cover that’s spread across 50 or 60 insurers in three or four insurance centres.
“To know how to do that and to know the appetite of all those insurers is a level of expertise that is going to be difficult for others to replicate,” says Croft, and while we might see entrants into the market that have new ways of doing things, he’s confident that brokers will continue to occupy an important position in the transacting of insurance. “We shouldn’t underestimate the extraordinary level of intellectual capital that goes into complex commercial insurance.”
