Thompson Heath & Bond chairman Vic Thompson explains the changing role of Lloyd's
1. How accessible do you think Lloyd's is to regional brokers? How has it changed in the past two years?
I think Lloyd's is very accessible to regional brokers especially where regional brokers are prepared to sustain a meaningful relationship with Lloyd's, either through Lloyd's brokers or the managing agencies themselves.
Those that only periodically send business hoping to get a decent quote will not find the market as accessible as those who are tied into a real working relationship.
In the past two years, Lloyd's has pushed to bring new Lloyd's brokers into the market but so far this has only had a minimal impact on the Lloyd's market.
2. Do you still see Lloyd's as the home for specialist risks?
In terms of bread and butter business the majority placed into Lloyd's is on the UK motor front. A huge number of regional brokers access the market for this type of business.
Away from this, Lloyd's is still known as a specialist home both for UK and international business. For example, few Lloyd's syndicates will be interested in underwriting a motor fleet consisting only of private cars with a good claims record, but they would be interested in haulage and risks of a similar heavy nature.
I also suspect this hallmark of Lloyd's specialist risks will continue.
3. How important is face-to face broking in the Lloyd's market today?
Specialist risks will always need specialists to place them. For the bread and butter motor business, the Lloyd's syndicates will use technology to placethis business and this type of business does not usually need the face-to-face environment.
However, we get more than 300 inquiries a week for motor fleet business and you, as the Lloyd's broker, have to decide which risks are for the Lloyd's market and which are not.
Usually, the more complex risks - those with heavy exposures - need face-to face negotiation in order to get the best quotation. You then need to really broke these risks and talk them through with the underwriter, not just put a bit of paper in front of him.
4. In your view, how important is the role of technology in the Lloyd's market today?
Technology is absolutely essential for every kind of business going forward. We have a situation developing at the moment where we have a THB repository for information, which can be accessed by clients and underwriters so that everyone has access to the same information.
You need good technology to support the broking process but I don't think it has had the same impact for placing purposes on Lloyd's as it has on those insurance companies writing bread and butter business.
5. With your acquisition of TL Clowes, can you see more merger and acquisition activity among Lloyd's brokers?
In the past month we have been offered six Lloyd's brokers. Historically it might have been one every six months. However, an acquisition of a company like TL Clowes is a merger partnership of two strong companies. Not all companies are like them.
The reason why some companies are for sale might be because they have burned their markets and now can't find markets to place their business or they may have survived purely on their investment income. This will not be allowed to happen when LMP comes into play as it aims to move money around the system faster.
6. What do you think has had the biggest impact on Lloyd's brokers in the past two years. What lessons have been learnt?
So many things are having a big impact on Lloyd's brokers at the moment that it is difficult to chose just one. There has, however, been a process in the past year where underwriters are regaining control of the pen.
A huge amount of Lloyd's business used to come through binding authorities. Binding authorities have not disappeared and I think they will come back again as they are an efficient way of bundling business into Lloyd's. Currently their demise has placed a huge additional workload on underwriters and Lloyd's brokers alike. Underwriters and brokers will need to exercise far more control though, as a lot of companies previously abused the binding authority system.