In the latest Gallagher H&M and war risks update, Simon Shrimpton, Tokio Marine HCC, said that 2020 had proved to be a year like no other.
Centuries of traditional face-to-face negotiation went digital in the matter of a few days at the start of the lockdown back in March. PPL, Whitespace, Zoom and Teams video conferencing became the preferred/only methods of placement and communication along with old-fashioned phone calls.
Shrimpton said that on the whole the market responded well. While business did not stop, digital trading compared to face-to-face negotiation had ultimately proved to be far more time consuming.
“We have had to work harder and longer to achieve our business plans”, Shrimpton said.
With underwriting and broking being the priority, this had meant that setting strategy, marketing, learning, information sharing, travel and ultimately forming and maintaining relationships had, to an extent, been left on a back burner, said Shrimpton.
Nonetheless, the LMA committees had continued to function. He said that they should be congratulated for their work in producing new clauses.
With the roll out of vaccinations and easing of lockdown restrictions, Shrimpton said that it was foreseeable that there might be a limited possibility of returning to the office in late spring / early summer.
“The question then arises – to what extent will we ever return to our old methods of working? No one misses the commute, I doubt many miss the early morning alarm or wearing traditional City attire either. Some of us might find the fit of old suits to be a challenge going forwards”, observed Shrimpton.
He felt that a “flexible future” was conceivable and likely.
However, he also noted that there were “so many advantages to a geographically centred market that this enforced dispersion has underlined that we must to some extent return”.
While the old prejudices that suggested Working-From-Home was essentially “skiving off” needed to be “well and truly banished”, and while there were advantages to commuting down the stairs, the fact remained that humans were social animals, “and possibly none more so than the Marine market”.
Shrimpton said that “market insight trades on the floor of Lloyd’s like currency. If you need some detailed insight everyone knows exactly who to tell and the speed with which that goes round can be quite incredible”.
He also observed that non-verbal communication was also a valuable factor in face-to-face negotiation – “the rolling of eyes, folding of arms, capping of the pen were all clear signs to brokers to perhaps retreat”.
Shrimpton also said that the challenge of training the next generation of bright young underwriters and brokers had now been added to the duties expected of a senior underwriters and brokers. In a virtual marketplace, this training was far more difficult given that underwriter/broker trust was typically built over face-to-face interaction – something that is at the core of London’s innate ability to trade.
“All in all, it sometimes feels like we are wading in treacle working from home and to make serious progress we need the invention that comes from an accumulation of minds in a single location. Roll on the end of lock down and a safe return to the office”, Shrimpton concluded.