Paul Brady talks to Bobbi Sills about the importance of professional standards in the insurance sector
The Covid-19 pandemic has thrown a spotlight on insurance like never before so “being able to provide public commitment to professionalism could not be more timely or important,” says Paul Brady, head of policyholder and third-party oversight at Lloyd’s.
In 2021, Mr Brady says the prestigious Lloyd’s coverholder status is seen as a kitemark for professional competence and integrity in the world of Managing General Agents (MGA) and delegated authority.
As the community continues to grow, with more than 230 entities approved worldwide by Lloyd’s in 2020 alone, so too do the processes in which requirements are set for new and existing coverholders. “We are increasingly seeing regulators around the world stepping up their expectations of intermediaries and underwriting agents, so it is vital we have processes in place that really allow our coverholder community to be able to demonstrate and evidence their professional competence,” he tells us.
“We have a thorough due diligence process for when we approve new coverholders. This includes working very closely with Lloyd’s country managers around the world to really get under the skin of the people who are joining us.”
More recently, Lloyd’s has placed greater focus on monitoring the ongoing suitability of coverholders through annual compliance checks and coordinated audits.
“We hope that coverholders continue to embrace the Lloyd’s agenda to maintain and raise underwriting performance as a means of supporting their business goals” he says.
In March 2020, the CII launched its own Chartered title for Managing General Agents – with the support of the Managing General Agents Association – in the Old Library at Lloyd’s.
The title gives MGAs a professional pathway to Chartered status, a symbol of technical competence and ethical conduct, and forms part of the CII’s commitment to boost public trust in a modern and relevant profession.
“The consistency and alignment between our standards at Lloyd’s and those set out by the CII, including the Code of Ethics, is very striking,” says Mr Brady.
“A relatable aspect of our ‘Future at Lloyd’s’ strategy is achieving a high performing culture, which is key to establishing a market that is inclusive, draws the most talented people and offers the most modern working environment.”
For this reason, from January 2021 existing Lloyd’s coverholders will be asked to declare if they are Chartered as part of the annual Lloyd’s compliance check process, explains Mr Brady. While Chartered status is not mandatory to be a Lloyd’s coverholder, Mr Brady explains, “There are huge benefits for consumers in knowing that they are dealing with an entity that is both a Lloyd’s approved coverholder and that has CII Chartered status.”
“Consumers can be confident that they are dealing with a firm that is looking to drive professionalism and is committed to keeping up to date with the latest rules and regulations.”
The consistency and alignment between our standards at Lloyd’s and those set out by the CII, including the Code of Ethics, is very striking
Setting the standard
Mr Brady has seen first-hand the focus on conduct risk management across the market and believes the profession is in a good position to respond to the challenges posed by the pandemic. “Covid-19 has highlighted the need to support customers by providing clarity both in terms of the products that they buy and the service that they receive,” he says. “Lloyd’s and its syndicates are well prepared and capitalised to respond to that challenge.”
A lawyer by background, Mr Brady spent much of his 25-year career at Lloyd’s as an in-house solicitor, where he worked closely with the market to implement the Lloyd’s Conduct Standard framework.
“The standards themselves apply to our managing agents and syndicates and state the need to embed and demonstrate a culture of ensuring good customer outcomes,” he says.
Since its creation in 2014, the framework has evolved to reflect changing regulations, in particular, the Insurance Distribution Directive which brought in new requirements around product governance, oversight and transparency.
“However, there is still work that needs to be done across the profession,” Mr Brady points out. “We welcome initiatives such as the recent Financial Conduct Authority business interruption test case, which helped bring greater clarity on the challenges some firms face around policy wordings. Ultimately, it is about building on the processes that are already in place.”
And in 2021 and beyond, what further work is on the horizon?
“Lloyd’s set out its recommendations for building simpler insurance products in response to Covid-19 in October 2020. This year, we are leading a project in collaboration with the Lloyd’s Market Association, to deliver tangible solutions such as looking at relevant product wordings to see how they can be simplified,” Mr Brady says.
“I am delighted to say that we are going to be working with the CII in areas such as risk literacy and transparency, building on the great work that the body has already set out in its Transparency Companion that it issued last year.”
“It is going to be very interesting to see how this work unfolds to support continued professionalism across the sector.”
Bobbi Sills is communications executive of the CII
Paul Brady studied Law at the University of Oxford, before completing his Bar Finals at the Inns of Court School of Law in 1994.
He joined Lloyd’s in 1995 as a solicitor, later becoming head of market conduct, then head of policyholder and third-party oversight in 2017.
Mr Brady is a member of Lloyd’s senior leadership team responsible for claims, delegated underwriting, conduct and complaints.