Lloyd’s chief executive, Nick Prettejohn urged the insurance industry to take urgent action to secure a profitable future and noted that the major transformation that’s taken place at Lloyd’s in recent years proves that improvements can be made if there is a real “will to win.”
Speaking at the Chartered Insurance Institute’s (CII) annual conference, Prettejohn warned that while steps have been taken across the industry to improve standards, more must be done to avoid repeating the mistakes of the past and becoming “slaves to history.”
“History strongly indicates that the industry needs to transform itself. But many previous attempts to tackle the problem have failed. The historian would be justified in concluding that the industry either cannot or will not become more efficient,” Prettejohn said. “However, we do not need to be slaves to history. The future lies much more in our own hands, and in our heads, because it is about an effort of will — a will to win.”
Prettejohn called for the industry to impose on itself underwriting discipline throughout the cycle to avoid the “peaks and troughs” of pricing and profit and warned that chasing market share for its own sake was a route to disaster.
“Time and again, in history’s two by two matrix, it is only the combination of strong management and strong underwriting that produces excellent results over the long-term, ” Prettejohn stated.
“In London, and specifically at Lloyd’s, we are taking active steps to break out of the rut of history where business process is an unchanging, forgotten and inefficient backwater. Whether it is policyholders wanting faster documentation and claims agreement, brokers wanting easier access and streamlined administrative processes or underwriters wanting better quality data, higher contractual certainty and lower frictional costs, we must and will deliver business process change.”
Prettejohn went on to stress the fundamental need to improve efficiency within the market and the insurance industry in general.
“Acting upon the lessons of history will be difficult and demanding but I believe that the historians of the future will determine that we and others in the industry set out to learn and act on the lessons, and that we were successful,” Prettejohn said.