It’s a rare opportunity to venture to the birthplace of the industry in which one makes their career. Fortunately for me, the birthplace of insurance still exists after starting in an English coffee shop over 320 years ago. And even more fortunately, I was invited along with 30 other North American insurance brokers to spend a week with the executives of Lloyd’s of London and their syndicates and brokers.
Most synonymous with Lloyd’s of London is their underwriting appetite for exotic risks, from a celebrity’s hair to a professional golfer’s performance bonus. However, a more accurate picture of their core practice is shown by the fact that they take part in insuring 97% of the Dow Jones industrial average and 86% of Fortune 500 US companies. They are the heart of England’s financial trade, much like our Wall Street or New York Stock Exchange.
Lloyd’s itself is a marketplace, not an insurance company, where syndicates (similar to insurance carriers) and brokers meet to negotiate coverage for risks and businesses from around the world. The business model is simple: a broker walks in with a folder (or, more recently, an iPad) of information on a particular risk or business and sits down with the syndicate underwriter to present it. After a few minutes of discussion, they decide whether to move forward or not, and in many cases, the broker walks away with a quote right then and there.
What caught my attention the most from my experience at Lloyd’s (in addition to the high caliber of the people) was the power of the personal, face to face communication that still thrives there. The efficiency of negotiating in person without the dilution of phone or electronics was measureable. What took them minutes there takes us weeks here. They are not dinosaurs by any means – phones, computers, internet, etc. were at their disposal, and they used them; however, they simply used them as secondary to do what could not be done face to face.
The large geographical spread of the United States, along with other factors, makes this type of communication a little more difficult for us. Still, to me it was a clear example of how trust and character have a way of resurfacing to the equation when there’s no capability to hide behind communication mediums. And such traits form a foundation on which longevity can be built, as evidenced by Lloyd’s of London’s 300 plus years and counting.
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