James Moorhouse looks at the London Market New Generation Group’s research into innovation
The London Market New Generation Group 2020/2021 recently published its research into the different perceptions of innovation during the current pandemic.
The world saw unprecedented disruption in 2020, brought on by the spread of Covid-19. With the London market already having a reputation for being perhaps too ‘traditional’, news of business interruption claims cast a further negative light on that area of the profession. As countries around the world went into crisis management mode, people everywhere were forced into finding alternative ways to continue to work and conduct their daily lives.
London market trading and operations swiftly went online as the City emptied. Existing technology that aided operations, such as Placing Platform Limited, saw an immediate increase in volume of usage, as new technology-aided methods were hatched and deployed. However, the changes in communication methods also meant the advances made during the pandemic were not widely publicised or talked about. This then raises the question whether progress is really made if no one knows about it.
In its research, the London Market New Generation Group surveyed more than 200 people across the sector to find out what they think when they hear the word ‘innovation’.
Surprisingly, ‘new’ only scored 6% as a response, with ‘improvement’ (19%), ‘creativity’ (19%), and ‘problem solving’ (16%) being more popular choices.
After interviewing several respondents in more detail, it seems that most people do not hear about innovation on a regular basis. By addressing the inconsistent communication regarding news of innovation, this could tackle obstacles such as a reluctance to change, cultural issues and perceived lack of talent. There is still a reliance on traditional ‘word of mouth’ methods for obtaining information, which means not everything is widely shared and can create insular cliques. Limited coverage in the national press may also impact prospective talent’s perception of insurance and thereby the attractiveness of the sector.
The increase of virtual networking and electronic placing is a unique opportunity to improve the frequency and method of sharing news of innovation across the sector. As internal communications are a popular source for individuals to obtain updates, there may be an opportunity to increase the regularity and reach of these communications, therefore improving awareness.
The post-survey interviews also considered more specific innovative examples that were demonstrated during the pandemic. Although responses varied, there were consistent opinions that little action was taken due to insufficient appearance of innovation on the agenda.
An interesting example provided by one participant was the development of an innovation programme within their organisation. The programme aimed to encourage individuals to share innovative ideas and concepts that would be beneficial for the organisation, which can then be further developed. This was a positive example of ensuring that innovation is considered at all levels, creating a diverse set of ideas. The survey results suggest that this may be prevalent in the London market, with 59% of respondents stating that all staff are encouraged to participate and generate innovative ideas.
Another discussion revealed an increased customer demand for alternative risk transfer solutions. One example was an organisation responding by developing a variety of products, including parametric insurance.
Parametric insurance covers the possibility of a pre-defined event occurring, rather than the loss itself. This is typically associated with weather-related events, however, increased demand is being seen for alternative trigger events. If the London market can be seen as a leader in this field and offer solutions where other markets may be reluctant, the market may become far more attractive to customers.
Considering the survey results, it seems that while innovation had increased during the pandemic, the awareness around it could be improved. Recommendations in the report include:
- The CII and other market-wide bodies to engage their members on innovation through webinars, courses and certifications.
- Improve the frequency and method of sharing innovation news in the London market (for example, via social media).
- Market-wide bodies to increase focus on sharing positive innovative outcomes, to improve the profession’s reputation and to attract diverse talent to the market.
- Progress should not be a secret and should be celebrated. By recognising advancements in innovation and technology, this will in turn mark the achievements of those who contributed but also hopefully inspire others to build on it.
When setting innovation targets for the new year, communication and awareness of how this was achieved should also be considered. Because if the sector does not progress with innovation fast enough, there is a real risk that London’s position as the leader in specialty insurance will be challenged.
James Moorhouse is content manager at the CII