Nick Frankland, Aon Benfield: ''Perhaps it is better to focus on the core franchise rather than chasing business in far flung markets.''

Nick Frankland, Aon Benfield: ''Perhaps it is better to focus on the core franchise rather than chasing business in far flung markets.''

 

 

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Nick Frankland, the newly anointed CEO of Aon Benfield’s London market business, has said that Lloyd’s has to act “more swiftly” in reforming its processes and reducing a cost base which is now higher than many of its competitors. 

 Speaking at the Monte Carlo Rendez-Vous, Frankland pointed out that Lloyd’s expense ratio is now 41 percent or “8 percent higher than its peer average”.

    Frankland – who joined Aon Benfield earlier this year from Guy Carpenter – highlighted that with 90 percent of Lloyd’s capital base from “corporates”, the majority of (re)insurers operating on the platform have a choice whether to write the business in Lime Street or through other platforms.

“Lloyd’s needs to embrace technology as quickly as possible”, he explained, adding that the initiatives around “digitalisation of its back office” are welcome but should be implemented as quickly as possible. In addition to the perennial competition from overseas markets, he added that Lloyd’s and the London market are facing potential challenges from uncertainty over Brexit.

He added that “Brexit cannot be allowed to undermine the attractiveness of bringing business into the London market”

As a consequence, he asked whether Lloyd’s should further consider some of the tenets of its Vision2025 business plan.

“Perhaps it is better to focus on the core franchise rather than chasing business in far flung markets”. 

Aon Benfield  and its sister firm, Aon Risk Solutions are the largest producer to the Lloyd’s market. 

Frankland also acknowledged that, despite its expense base, Lloyd’s remains a popular platform and an influential force in the global P&C
(re)insurance industry. 

“In the past year we have seen 8 new syndicates providing some £750mn of additional capacity and there will be more next year”.

Japanese reinsurer Toa Re and Indian heavyweight GIC are both thought to be poised to establish so-called SPA syndicates next year. 

“The challenge is to transform and be as relevant for purpose as possible”. 

If Lloyd’s does that then I am confident that it will be an efficient, technology enabled marketplace within the next five years”, he concluded.