“The insurance industry is facing a series of critical choices in the near future,” stated Lloyd’s Chairman Lord Levene, speaking before an audience of 130 insurance professionals at the Conrad Hotel in Hong Kong.
Lord Levene cited globalization, technology and financial stability as the most challenging sectors. He said that the industry had the choice to either “plough on” in the same direction or to face up to the challenges, grasp the responsibilities and change direction.
Levene indicated that due to globalization and the opening up of world insurance markets the industry faced new responsibilities. He argued that domestic markets must liberalize and insurers must strive to reach the highest standards of corporate governance transparency and accountability.
On technology, Levene stressed that “Collectively, as an industry, we have a responsibility to get smarter about technology – about using it to model and understand risk, about harnessing it to revolutionize processing, about using it to deliver the insurance product more efficiently. The path we take will either drive the industry forward into a successful future, or leave us standing. Raising standards and increasing efficiency are two of our top priorities at Lloyd’s. Our focus on them will be relentless.”
Financial stability is being threatened by what Levene called a “deadly cocktail” of climatic and demographic change. He noted that the industry is now painfully aware of spiraling costs from man-made causes. “The responsibility we must grasp going forward is to ensure discipline is maintained, in order to preserve a healthy, robust industry able to meet its future obligations,” he stated.
He added that “At Lloyd’s, we have taken that responsibility very seriously and our radical plans for modernization and reform are now well under way. In a global market with increasingly sophisticated customers, increasingly mobile capital, and an increasingly efficient and technology-driven distribution system, Lloyd’s has always understood that standing still is not an option.”
“At each crossroads we come to – globalization, technology and financial stability – we must stop and we must respond. And only by responding to the opportunities of globalization, by harnessing the power of technology, and by creating financial stability can we do what we are good at. That is creating certainty in an uncertain world,” he concluded.
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