London still has much to offer as a global insurance centre if it changes with the times, a leading figure in the industry has said.
Karl Hennessy, CEO of Carrier Solutions at Aon, said that London’s insurance market had survived multiple challenges over the past 300 years and would not be derailed by issues such as Brexit. He was addressing the Guernsey Insurance Forum in London as its keynote speaker.
“We have been here before. We have faced major dislocation in our market place and the ability and opportunity to trade have come through it. Brexit is an unwelcome distraction but not the only challenge we face. And there are real opportunities still out there,” he said.
Mr Hennessy described London as a “unique insurance eco-system”.
“We have trust and material and long-established close working relationships with centres of excellence such as Guernsey over a long time,” he said.
“I believe we are the insurance sector equivalent of Silicon Valley. We have a high concentration of insurance-related intellectual capital where ideas, opportunities, challenges and innovations can be quickly resourced and actioned. The London market develops solutions which match customer needs in a way that no other market has been able to do.”
Mr Hennessy said that Aon’s global research had revealed that insurance could only provide solutions or part-solutions for 50% of the top 50 business risks identified by risk managers from firms across the globe.
“There is a huge opportunity for innovation in fields such as risk identification, litigation, management, retention, transfer, and cyber. Clearly a proportion of these risks are retained on balance sheets, and this is a huge opportunity for the specialist risk market to innovate meaningful solutions to help entities to manage the transfer of that risk.”
He called on the London industry to “galvanise itself” to help clients navigate these risks, potentially through partnering, including with jurisdictions such as Guernsey.
“London is ideally placed to capitalise. Modernisation is key – not just doing what we currently do better, but challenging why do it that way, or why do it at all? Every aspect of what we do and how we do it must be challenged. This is not business as usual. We can’t leave our fate to chance.
“We must focus on innovation – improve how we do things, where and why we do them. And continue to invest in the talent that underpins the market place and continue to accentuate and differentiate the London market place from others.”
Dominic Wheatley, Chief Executive of Guernsey Finance, said: “Insurance today is all about responding to continual challenge and change with innovation, and having the ability to spot and seize an opportunity. That is something that Guernsey has been, and still is, pretty good at. We are the number one captive insurance domicile in Europe for a reason. We have been doing this for a long time.
“Our relationship with London is good and strong, and I expect that will be enhanced after Brexit. A key issue from our point of view is that there will no longer be any EU border between ourselves and London, our largest market for financial services.
“I feel we are right to feel optimistic about the future of our industry. Figures presented at the Forum demonstrate that captive insurance is not in decline. Yes, it is facing challenges, but Guernsey will respond to those challenges, and will continue to deliver excellent solutions to our clients.”