Results of a global study comparing reinsurance trading practices in the Lloyd’s, Bermuda and continental European markets will be exclusively unveiled and debated by industry chief executives during this year’s Insurance Day Summit London.
Professor Paula Jarzabkowski, from the renowned Aston Business School, will present the findings from the latest phase of her ethnographic study of the sector, which is examining a number of issues including face-to-face and electronic trading and the implications of both of these approaches for industry evolution. Although this issue has been much discussed in industry circles in recent years there has been little systematic evaluation of future change factors, until now.
Jarzabkowski specialises in ethnographic “fly-on-the-wall” approaches, observing how people’s everyday business practices shape markets.For the past year, she and her research team have been using these methods to conduct a study commissioned by the Insurance Intellectual Capital Initiative (IICI), which is a consortium of organisations associated with the Lloyd’s insurance market.
Supporters of the IICI include Hiscox, Amlin, Aon Benfield, Liberty Syndicates and the Society of Lloyd’s. Hiscox chief executive, Bronek Masojada is also chairman of the IICI’s steering group.
The data set for the study is unique, comprising in excess of 350 in-depth interviews and over 1,000 observations of live reinsurance trading across 26 firms in the three markets, as well as interviews with a number of key cedants in different markets about their reinsurance buying strategies and expectations.
Specific findings are expected to show how the selective use of face-to-face and electronic interaction can reduce inefficiencies and improve decision-quality across different types of global markets.
This part of the study is separated into four main areas: identification of areas of convergence but also substantive differences in workflow and risk evaluation between markets; key learning points about redundancies and inefficiencies in both markets; and the development of frameworks for relationship management, risk evaluation and the selective application of face-to-face contact to address these learning points.
Finally, the trading process is broken down into specific modules of activity with recommendations for best practice in each modules.
Reinsurance carriers and brokers can then use this modularisation process as a guide to evaluating and changing their current practices.
Jarzabkowski will present the results from the latest stage of her study of the global reinsurance industry on the second morning of the summit (May 16).
Key findings from the study will then be debated during the chief executive leadership panel, which follows. This session will feature Hannover Re chief executive, Ulrich Wallin, the president and chief executive of Navigators Group, Stan Galanski, chief executive of Scor Global P&C, Victor Peignet and chief executive of Zurich Global Corporate UK, Ann Haugh.