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Brokers, MGAs upbeat about Future at Lloyd's plans ahead of launch

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Brokers, MGAs upbeat about Future at Lloyd's plans ahead of launch

Some brokers and managing general agencies are making positive noises about the plans for the future of the Lloyd's of London insurance market, despite assertions that they will be a threat to traditional wholesale broking.

Lloyd's will unveil its Future at Lloyd's blueprint on Sept. 30 following a market-wide consultation. It set out a prospectus May 1 featuring several proposals for new initiatives, including a risk exchange, a platform for complex risks and a faster claims service.

Steve Hearn, CEO of broker BGC Insurance Group, acknowledged that some had interpreted "inherent threat" to traditional wholesale brokers from the risk exchange in particular, but he said in an interview: "I just don't agree with those who have concluded that is the direction [Lloyd's CEO] John [Neal] is taking it."

Both BGC Insurance Group and its parent company, capital markets broker BGC Partners, believe that wholesale "is actually a growth business model rather than being threatened from these dynamics," Hearn said. He added that it was too early to draw conclusions from the high-level view presented in the prospectus and that the market will have better insight once Lloyd's publishes its blueprint.

Andrew Draycott, CEO of London market wholesale broker Ed Broking, part of BGC Insurance Group, described the Future at Lloyd's plan as "a very positive thing." He said "all brokers would appreciate and the London market would benefit from a more streamlined, more efficient and better claims service." He also described the risk exchange proposal as "critical."

"We think that digital connectivity and ability to trade in a slightly more liquid fashion for certain more commoditized risks is imperative rather than just valuable," Draycott said.

Lloyd's 'exciting again'

Some MGAs are also positive about the plans. Talbir Bains, founder and CEO at Nephila-backed underwriting agency Volante Global, which sources its capacity outside Lloyd's, said his company was looking to work more closely with Lloyd's in part because of its push for modernization.

"When I go through what John is trying to achieve with Lloyd's, it's almost exactly what we have been trying to do in Volante" in terms of using technology, data and analytics, he said. Bains added that if the Lloyd's vision comes to fruition, "Volante and Lloyd's would be a great natural partner, so we are very excited about Lloyd's capacity and partnering with Lloyd's going forward."

One question around Lloyd's, according to Bains, is what competitive advantages it had other than its array of international licenses. He suggested that the overhaul, including the Lloyd's drive for profitability that began in 2018, would improve the market's competitive standing.

"The answers to that would be pretty stark if you had asked that question this time last year," he said, adding that with Neal's vision for Lloyd's, the market was "exciting again."