The Lloyd's of London insurance market must continue to innovate in order to meet buyers' needs and ensure that capital flows into the market, according to Mark Weil, the CEO of Marsh U.K. & Ireland.
Addressing delegates at an Insurance Institute of London lecture at the Lloyd's Old Library on Tuesday, Mr. Weil said the insurance industry should strive to be more customer-oriented rather than predominantly product-oriented and ensure that it really adds value for buyers.
Insurance should be more than a mechanism for smoothing cash flow for larger buyers, Mr. Weil said.
The industry also must address the issues of trust that “dog it” and seek to prove wrong the notion held by some that insurers will seek to avoid paying valid claims, he said.
Mr. Weil, who joined Marsh a little over a year ago after a career in banking and consulting, said the insurance industry needs to prove its relevance to buyers.
He noted that innovation was needed to make sure that insurance could address the major concerns of C-suite executives.
Mr. Weil said that while there is debate about the benefit to buyers of the recent establishment of sidecar and quota-share broker-underwriter facilities by Aon P.L.C. and Willis Group Holdings P.L.C. to underwrite business at Lloyd's, such mechanisms may suggest there are structural inefficiencies at Lloyd's that could be addressed.
Mr. Weil said that Marsh uses such facilities in certain cases where capacity is scarce. Such mechanisms can benefit buyers where they enable the broker to complete the lineslip or obtain a reduced rate, he said.
He noted, however, that concerns may arise when the primary beneficiaries of such arrangements are the capital providers or brokers and not the insurance buyers.