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Masojada: Climate, digital among key insurer trends

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Four key themes that the London insurance market will be grappling with in the coming years are climate risk, diversity and inclusion (D&I), systemic risks, and digital platforms, Hiscox CEO Bronek Masojada told Insurance Insider’s London Market Conference today.

On climate risks, Masojada said rather than focussing on exclusion policies, UK insurers would need to grapple with the primary issue of meeting legislative requirements to be carbon neutral by 2050.

Hiscox will soon be asking all suppliers and brokers for details of their own environmental plans and in time, for progress updates against them, as part of this shift. “Passive resistance is futile”, the CEO noted.

On D&I, Masojada paid tribute to former Lloyd’s CEO Inga Beale for getting initiatives underway, as well as on digital placement targets, despite being met with resistance at the time.

On digital placement targets, this had “saved the market” during the pandemic as it had paved the way for trading remotely, he added.

More broadly on digital trends, the Hiscox CEO said this will have huge significance in changing distribution practices and mean insurers looking to place more business directly rather than through intermediaries.

Masojada gave CFC as an example of a firm that had leveraged digital platforms to scale up in a major way. He also noted that digital solutions had helped Hiscox to build up a book of around $100mn in flood premium for US coverholders, with the hope of growing this business to several times that level over time.

On systemic risks, Masojada credited Pool Re CEO Julian Enoizi for starting conversations around how they should be handled. While the industry couldn’t handle systemic risks alone, with there being huge value in government backstops, Masojada pointed out that such risks were crying out for a “changemaker” to tackle them.

On these four key trends, the outgoing CEO said carriers and executives would need to decide whether they were going to tackle them as “wave surfers”, “change makers” or “change resisters” who preferred to follow the status quo.

He reminisced about various executives who had fallen into each mode during his career, but critiqued those “wave surfers” who followed the wave of a trend before selling out of a business.

“These people made a lot of money but none of us remember who they are.”

He picked out change-makers as people who had helped to introduce the performance management framework at Lloyd’s, or who introduced corporate capital to the market.

While the industry is accustomed to thinking of insurance as being primarily shaped by major events such as hurricanes or terrorism attacks, Masojada noted that this was not solely the case.

“The events are often the initiator, but it’s the reaction of groups of people within the market that actually determines what happens.”

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