Lloyd’s needs to become more relevant to its clients: Miller
Lloyd’s needs to adapt to become more relevant to its clients, Michael Papworth, head of Miller’s property/casualty business unit and head of Asia, told Monte Carlo Today.
“We are doing significantly less business with Lloyd’s than we used to and finding that to service our clients we have to throw the net out wider,” Papworth said.
“We would like Lloyd’s to recalibrate and become more relevant to our business, as it was a few years ago. Across our global portfolio we used to place some 30 to 40 percent of our business; today it’s probably less than 10 percent.”
The team Papworth started at Miller is 10 years old in 2019 and he is proud of how the business has grown.
“Everyone said it was impossible to set up a smaller platform doing facultative that would compete with Aon, Marsh, and Willis. Ten years on I have a team of 120 people in five offices. It feels fantastic I’m proud of what we’ve achieved,” he said.
“Our job is always to compete with the big three brokers, so we have to be very nimble, quick and adaptable. We are always looking for innovation and for more efficient ways of transacting reinsurance. Our people pride themselves on very rapid service.”
His clients’ main concerns focus around volatility, mainly within retention. They have well established and structured treaty placements, but within their retention there are pockets of risk they are not comfortable with and which cause earning volatility. This is where facultative reinsurance provides the solution.
“Facultative is very effective at taking those risks off the balance sheet,” Papworth said.
“The approach we take is to look at portfolios and identify the outliers that cause problems for clients. It’s often less than 5 percent of a portfolio that has any issues, but that is our sweet spot.
“Balance sheet volatility is where facultative now operates. A few years ago it was used for capacity and capital but it is mainly now a volatility tool and it’s a very efficient way of taking out issues around cat or high risk industry,” he concluded.
