People and relationships are what make this industry work
You often hear chief executives across the business spectrum claiming that people are their biggest asset. In few industries is this more true than global (re)insurance.
Take the example of UK motor insurer Markerstudy’s underwriting chief Gary Humphreys. He doesn’t like to chop and change the reinsurers he uses, but will make an exception if a trusted individual underwriter moves companies. In short, his loyalty lies with the person, not the company.
While those who spend a great deal of time and money promoting companies’ brands may baulk at the suggestion, this focus on people is one of the industry’s key strengths. The importance attached to relationships and their maintenance over several years means that deals can get done that might otherwise be impossible.
The importance attached to relationships means deals can get done that might otherwise be impossible
The level of personal interaction and strong relationships in Lloyd’s and the US excess and surplus lines market is in part what allows these markets to bear risks that more conventional ones avoid.
But this strength can also be a weakness. Mergers and acquisitions can present challenges: if key individuals in an acquired company don’t like their new owners, they can take a large amount of the value of the business with them when they walk.
This is particularly true of smaller companies such as Lloyd’s syndicates, where individuals or small teams can be responsible for most of the business.
With its reliance on people, the industry could be particularly badly affected by a shortage of young talent to take over as the old guard retires. In this business, experience counts for more than formal training, so it pays to start young. But few graduates seem to know the reinsurance industry exists, let alone want to work in it.
The industry must be careful not to lose its people power.