Lloyd’s Turk doubles down on opportunity to build reinsurance market share
Chief underwriting officer Rachel Turk has doubled down on the opportunity for Lloyd’s to reverse its loss of global market share in reinsurance, highlighting that a continued focus on performance management has handed syndicates the “legitimacy” to grow.
Lloyd's currently holds a circa 5 percent share of the global commercial and specialty (re)insurance market, which is estimated at around $1.4trn. Despite growing its reinsurance gross written premium by almost 13 percent to £17.3bn last year, the line only represents around 33 percent of the business underwritten at Lloyd’s.
Speaking at The Insurer’s Pre-Monte Carlo Forum on Wednesday, Turk described Lloyd's declining share of global reinsurance premium as “the elephant in the room” but stressed that the class remains an attractive growth opportunity.
The former Beazley head of strategy – who formally joined Lloyd’s earlier this year – also strongly dismissed any notion that the Corporation was purposefully placing barriers in the way of those seeking to write more reinsurance business from Lime Street.
“I've only been in the role for nine months and have lost count of the number of times that people have asked me to try and unblock things for the market, to allow the market to write more reinsurance,” Turk told attendees at the event.
“It is a myth that the Corporation has any blockers or impediments to the writing of reinsurance. I'm very vocal on this – there are franchise guidelines, there are rules and there are bylaws, and I will happily change any one of those if they were acting as an impediment to doing business at Lloyd, but there is no such thing.”
Instead, Turk said the answer may be to look outside the Corporation.
“There are some really great reinsurance businesses at Lloyd’s. I just think there could be more,” Turk said.
While syndication remains Lloyd’s “superpower”, Turk acknowledged that this method of doing business can be “challenging” through a reinsurance lens.
The effort and cost of dealing with a large number of markets – each with their own wordings, appetites and volumes – may lead insurers to seek reinsurance via an alternative market or platform outside Lloyd’s, she explained.
“What do we do to address this? We innovate and we collaborate,” Turk said. “That may mean thinking about reinsurance in a slightly different way, collaborating differently with brokers and reassessing the needs of the market both inside and outside Lloyd's.
“Lloyd is predominantly an insurance marketplace, but we should be able to grow our share of reinsurance and do it smartly,” she continued.
Turk said (re)insurers operating syndicates have earned the right to grow. She explained that years of performance management meant that firms were now armed with the knowledge that performance and discipline is what provides the legitimacy and credibility to grow.
Lloyd’s is currently measuring this success through its ability to maintain top-quartile performance against its global peer group.
“That is where Lloyd's should be. That is where we are right now, and that's what we absolutely must maintain. The discipline that the market now demonstrates was hard fought. It was born out of those tough remediation years, but it was really necessary,” Turk said.
While Turk stressed that rates are flattening and not softening, she said the market is “exceptionally good” at talking itself into rates going down before it actually happens.
“We've now got a load of muscle memory instilled in the market about what portfolio management looks like and that will stand us in really good stead as we go through to an eventual market softening,” Turk added.