Same people, same problems: Majority of execs cynical on reforms at Lloyd’s
While there is a sense of cautious optimism around the reforms revealed by Lloyd’s this week, a majority of market participants believe they will not be enough to adequately change the market.
Lloyd’s revealed comprehensive organisational changes including the formation of new units and teams this week (Monday, December 5), which the market claims will enable it to deliver Vision 2025, its business plan and goals to that year, more effectively and efficiently.
Asked if the organisational changes at Lloyd’s be enough to reshape the market into something more fit for the modern age, 51 percent of respondents to an online survey by Intelligent Insurer said they would not be. Some 17 percent said they would make the market fit for purpose while 32 percent sat on the fence.
Asked to explain their comments, the gist of those respondents who were cynical about the changes was that the changes were simply a case of shuffling the same people around the organisation and more radical changes are needed.
“Shuffling people between departments doesn't change systems, processes or modernise the market on its own,” said one respondent.
Another added: “We’ve seen proposals come and go with little effect. Moving regulation responsibilities around doesn't do anything about ease of access and efficient handling of matters. The personnel are the same and so will lead the same behaviours.”
A number of respondents stressed a frustration that the market interferes too much in the activities of individual syndicates, which should be left to innovate.
“Despite diversity of responsibility still more totally unnecessary job creation. More autonomy and freedom of action should be given to syndicates, many of whom have already established overseas entities to escape Lloyd's over regulation - before Brexit,” one said.
Others noted that the market is in a tricky position trying to both innovate and regulate at the same time. “The market cannot innovate and over regulate underwriting at the same time. They are two opposite forces,” one said.
Another added: “From my point of view is just a organisational change. We need fundamental change in culture, behaviour and organisation. Change happens at a glacial pace within Lloyds, and this is a time for execution speed to increase dramatically.”
Of the 17 percent who felt the changes would work, fewer explained why but those who did expressed the view that the market also needed to look at its wider footprint. “Lloyd's should expand in emerging markets in Africa, Middle East and Asia to meet the demand for capacity and expertise,” one said.
Of those respondents who answered ‘maybe’, their sentiment was that the proof will be in delivery of changes and how they are implemented. “In past overhauls there has never been any follow through and never any measurement against stated goals,” one said.
Another added: “Implementation depends on the culture being open to change.”
A broader selection of comments offered are published below:
“It won't be able to move quickly enough. It suffers from Innovators Dilemma and must satisfy existing customers so has not enough time for new ones.”
“The market is doomed as long as it has dinosaurs running it.”
“The Corporation is a bloated entity, with many people doing jobs that serve no value added purpose to managing agents, with their work only being shared internally (e.g. Broker Relationship Management). The Corporation needs to restructure to reduce head-count, focusing on core capabilities.”
“Where is the value added? Another organizational change which will only lead to more regulation, confusion and cost. Best it put the practitioners back in charge and get rid of the administrators.”
“Transacting business at Lloyd's is too expensive. The corporation is bloated and needs to cut its central costs.”
“Sometimes too much centralisation ends up suffocating innovation. A light touch is often better.”
“Only if they fight the FCA to make compliance more relevant for the market.”
