The insurance industry provides ’a framework for bouncing back’, as risk can never completely be eliminated and ’we cannot just look to politicians for answers’

Thanks to ongoing uncertainty surrounding the Covid-19 pandemic and the Russia-Ukraine war, ”there will always be a place for insurance”, according to John Neal, Lloyd’s of London’s chief executive.

During his closing address at Marsh McLennan’s Rising Professionals’ Global Forum 2022 on 30 June 2022, he told delegates: “The awareness of insurance and the value it can add has never been higher. It’s a core part of a functioning society, helping people to prepare for the worst and to live more confidently in everyday life.

”What we all do is incredibly relevant and it will always be so. When the unexpected happens, people look to those in the risk management business for answers and a framework for bouncing back. 

“Stuff will always go wrong. Try as we might as humans, we’re never going to be able to eliminate risk from our lives. Sometimes, it just takes being in the wrong place at the wrong time - as I found with my recent cycling accident.”

Neal was involved in a cycling accident on 26 March 2022 and has taken a leave of absence from Lloyd’s to recover.

Meaty issues 

For Neal, insurance is a “timeless and essential” product - he believes there has never been a ”more interesting time” in the industry than right now. 

He said: “There’s a whole list of meaty issues to tackle.

”How we respond to climate change has both long-term and immediate impacts, social and environmental costs and local and global repercussions – and insurance is far from on the sidelines.

”We’re right at the frontline of responding and we’re driving climate action through the products that we’re able to create.” 

Another “meaty” topic is high inflation and low growth in the macroeconomic environment, Neal added. He urged the insurance industry to consider associated risks for clients, supply chains and organisations.

Furthermore, he explained that the Covid-19 pandemic had highlighted the value of “really clear policies” and the need to “explain to customers really articulately when they have cover and when they haven’t”. The pandemic additionally cemented the industry’s role in responding to claims and building resilience.

Neal continued: “There’s no point waiting for these so-called black swan events to hit and then writing a cheque and saying ’great, we’ll wait for the next one’.

”We need to understand the causes. We need to share our insights and help society prepare for inevitable future events. And that’s what we’re trying to do at Lloyd’s and across our sector.” 

He also referenced the Russia-Ukraine war, which he believes has caused a “devastating human cost and a reordering of the energy, political and technological priorities that we’ve yet to begin to fully understand”.

Neal added: “The challenge for us, as insurers, is to manage these complex risks and to do so with the sensitivity it requires, while at the same time being forward-thinking enough to think about the challenges that could arise in a month, in a year and possibly even in a decade.

“Where does the current crisis leave us in the race to net zero? What does the current crisis mean for our future relationship with China or with India? And how’s that going to be impacted in the years ahead? We cannot just look to the politicians for these answers – we have to become the experts ourselves.”