The London market needs to work with the emerging insurance hubs around the world rather than against them in order to stay relevant, according to
RSA’s sales and distribution director.
Earlier this week, one Lloyd’s broker told Insurance Business that
London is no longer the centre of the insurance world. Now, RSA’s Owen Thomas, who is also responsible for leading the firm’s broker relationships, has warned that the London market needs to roll up its sleeves in the face of international competition.
With a growing number of burgeoning insurance markets around the world, London needs to rethink its product-first mentality and move towards a consultative approach that puts customers first, a recent RSA report on future-proofing the market found.
“London should work with the emerging hubs around the world rather than against them,” Thomas told Insurance Business in an interview. “The harsh reality is, London is not going to become more cost-effective, or quicker to respond... and it will take an awful lot of investment for it to become a better place for technology than Singapore, for example, or Tokyo, or any of the other insurance hubs around the world.”
“If you look at what should be London’s competitive advantage and relevant strength, versus some of the other insurance hubs around the world, it’s the amount and the availability of talent and intellectual capital in a very small geographical location,” he said.
However, should the London market try to compete with those emerging markets in areas such as cost-effectiveness, or response time, it’s likely to fail, he warned.
“We’ve got such a critical mass of knowledge in London, and just by the geography of Lloyd’s and the London market, we’re all very close together,” he explained. “So actually, the intellectual capital is here, but the speed of response and the access to the customer base might be in Miami, Singapore, or Dubai.
“But if we try to compete on knowledge, risk management, claims management, intellectual capital, and new products and solutions, there’s every chance that we will be very successful.”
But instead of competing, the market needs to leverage its strengths and work alongside the newer entrants to the industry. “There is a way of working in parallel,” Thomas said. By combining the talent of the London market with the distribution opportunities of international hubs, there is a shared opportunity for everyone.
The main takeaway for brokers is not to be complacent, Thomas concluded.
“London is still very much relevant and will continue to be relevant, but London needs to earn every pound, euro, and dollar of premium that comes in,” he outlined. “If we take that approach, combined with working with the other insurance hubs around the world, I think London has got a fantastic future both in the broking and insurance markets.”
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