Exclusive: What the departure of Lloyd’s of London would mean for the City
Lloyd’s of London may be leaving its gigantic headquarters in the City. A pandemic-induced hit to office footfall has left it mulling a move to another location.
The company told Morning Wire recently it is weighing up leaving iconic headquarters’ as it seeks out ways to adapt to shifts in working habits brought about by the rapid digitalisation of its business and Covid-19.
If Lloyd’s indeed decides to pack up, it may signal quite a shift in the Square Mile’s office market and London’s insurance space, the world’s largest.
At its heart has been Lloyd’s iconic ‘inside-out’ building on Lime Street, which first opened its doors in 1986.
Footfall has increased recently, however, with The Lloyd’s Market Association (LMA) recently reaching a market-wide consensus ensuring Lloyd’s underwriters will be physically present for in-person trading with brokers on Tuesdays, Wednesdays and Thursdays, either in the Lloyd’s Underwriting Room or their offices.
Nevertheless, what would such a move mean for the one of the last standing ‘face-to-face’ industries?
Morning Wire sat down with Gerry Goodwin, director at data consultancy Dufrain to discuss what a potential move signposts for the digital transformation in the City.
Can the potential exit of Lloyd’s of London be seen as a turning point for one of the last ‘face-to-face’ industry’s move to remote work?
The face-to-face meetings and deal making continue to be at the heart of business at Lloyd’s of London in spite of remote working and the change in office culture. The difference is that face to face is now a nice to have, rather than an essential part of the job.
“We won’t see the apocalyptic cities of April 2020 again, but the nine to five, Monday to Friday work week is over.”
Gerry Goodwin
The insurance sector, and financial services overall, are gradually moving to a hybrid working environment. The challenge is ensuring the market has the right tools and data foundations to actually adapt to full hybrid working and embrace digital adoption, especially the culture.
Despite these obstacles, change is undoubtedly on the horizon. E-trading and e-placement grow ever more prominent in financial services and insurance. What do insurers and brokers need to do to ensure that their data strategies are fit for purpose?
Firstly, make sure they’ve got a data strategy in the first place! That may seem simple, but we see so many organisations that just don’t have one that is fit for purpose. It’s about putting data in the right place in the organisation.
Data is the one thing that flows through every part of the organisation and impacts everyone. It’s also the one of the key things financial services companies have that can differentiate them from the competition.
Empowering the Chief Data Officer and letting data lead is the best way to become data driven and employ data to meet business objectives. We work with companies to drive their data strategy from their business strategy, so data becomes an enabler.
What does this tell us about the way information and data is now used and communicated?
This potential move from one of the icons of face-to-face business is just another step in the evolution of business. Tech has always enabled more efficient processes. Letters became telegrams, which became phone calls and now they are video calls, and even, dare I say, meetings in the metaverse one day. The move to online demonstrates the importance of technology and data’s usage in pretty much every aspect of the work environment.
“Even before the pandemic, the leading underwriters and brokers were investing heavily to utilise these tools to supplement decision making and provide more information to better manage portfolio risk.”
Gerry Goodwin
The last two years has just accelerated the need for this change. We won’t go back to a full five days in the office completely, but we will recognise the bits that make us less efficient: the lack of human interaction, fear of missing out, or simply getting out of the same four walls.
London is the world centre for speciality insurance and that knowledge base isn’t disappearing anytime soon. Underwriters and actuaries will still have a huge role.
What is beyond doubt, though, is that technology can answer many of the challenges faced to make employee’s lives easier, freeing up more time to focus on the parts of the job they enjoy.
Gerry Goodwin
We hear lots about artificial intelligence in the news. How will this affect the City?
It’s important to remember AI is just another technology, so it’s certainly nothing to worry about – there won’t suddenly be robots roaming the streets of London! AI is focused on efficiencies, mainly automation. The best way to harness its potential is to use it in conjunction with human expertise. In insurance, the data used to arrive at a premium could be applied to AI, but the underwriters’ speciality market knowledge cannot.
Despite the hype, due to poorly organised and managed data, most AI opportunities are a long way off for most companies in the City. But it’s about walking before running. AI processing is the top step of the journey towards being ‘data driven’. Let’s call it step five of five. The majority of companies in the City are at step one, and the journey will take many years.”
How can people and data work together for the best outcome?
It’s all about using the strengths of both. A good example is the banking industry. Despite online banking capabilities, there is still a need for face-to-face interaction, e.g., in branches. What has changed there and will change in insurance, is the role people play and the degree of automation introduced.
Having the right data quality is at the heart of successful online commerce. Mistakes can’t be glossed over in a “virtual” meeting and absolutely not when commerce is automated. If an insurer’s systems aren’t aligned and the data in them isn’t managed correctly, issues from underwriting errors to claims payments being incorrectly processed will arise.
London is the world centre for speciality insurance and that knowledge base isn’t disappearing anytime soon. Underwriters and actuaries will still have a huge role. What is beyond doubt, though, is that technology can answer many of the challenges faced to make employee’s lives easier, freeing up more time to focus on the parts of the job they enjoy.