To deliver growth, Lloyd’s of London’s new CEO has to be ruthless
In order for Lloyd’s of London to prosper, Patrick Tiernan must be ruthless in his leadership, writes Lloyd’s Market Association CEO Sheila Cameron
The arrival of Patrick Tiernan and Charles Roxburgh as the new Lloyd’s CEO and chair is hugely welcomed by the Lloyd’s Market Association (LMA) and our members. They move into these roles at a pivotal point and together they have a real opportunity to take the Lloyd’s marketplace up a gear. This new team will inherit a global insurance platform in a strong position to move forward based on sound foundations: performance has shifted strongly forward; innovative capital solutions have come to the fore; regulation has become outcome and principle-focused; and we’ve made a step change in our approach to cultural change across the market.
The London insurance market, which has Lloyd’s as its beating heart, has moved from being a fifth of the City’s GDP in 2016 when the last chairman joined, to being responsible for a third of its GDP today, with 90 per cent of its premium emanating from outside the UK. Lloyd’s and the London market, and the people they employ, have never been more critical to UK PLC and are recognised as global leaders. But we shouldn’t take that success for granted in an increasingly competitive world – we need to build on that success to generate further sustainable growth.
The LMA’s view is that Patrick and his executive team will need to continue to work in partnership with the Lloyd’s market to listen and then develop a vision as to how they want to facilitate and service our global platform of the 2030s.
What we need from Lloyd’s new top team
So, what does the LMA think this looks like in practice? We believe there are five main priorities for Charles, Patrick and the incoming executive team: first and foremost, they must maintain their ruthless discipline over underwriting performance to ensure our marketplace delivers its growth potential. Underwriting must remain profitable over the course of the insurance cycle. This needs to be balanced with allowing the managing agents the freedom to underwrite and innovate as individual businesses within a strong structure.
Second, the Lloyd’s market must remain attractive to capital, with a continued focus on innovative solutions for new and existing capital, and a clear value proposition to the different capital types that are attracted to the market. The Lloyd’s market is the home of global insurance innovation, not just in our products and our capital but also in how we work.
To that end, the third objective is to continue our simplification and digitisation journey, as we grasp the opportunity of artificial intelligence and data. While AI is today helping insurers to reduce costs, we must harness it to help evolve products towards prediction and prevention of loss.
Fourth, Lloyd’s must continue the drive towards principles and outcomes-based oversight, with ongoing reduction in duplication across Lloyd’s, the Prudential Regulation Authority and the Financial Conduct Authority. The three regulators together should be collaborating to assist the Lloyd’s market to remain competitive with strong safe foundations but also the freedom to innovate.
Patrick and the new executive team must also support the market in leveraging the unrivalled license structure it has in place to the greatest effect and continue to protect the worldwide franchise.
And finally, if we are going to attract the most outstanding global talent in our market, we must offer a world-class culture across the market.
We at the LMA want to engage collaboratively with Lloyd’s to create the most compelling global platform of the 2030s, which is optimal for insurers, for our broker trading partners, our policyholders and finally for our people. By working together, we can make this market the best it can be for all of its stakeholders.
Sheila Cameron is CEO of the Lloyd’s Market Association