Talent, Technology and Too Many Acronyms: An Interview with Caroline Wagstaff, CEO of the London Market Group

They discussed the attributes that make the London market unique, the importance of staying relevant and connecting with today's fresh talent, and the need to continue lobbying the government on issues of risk and insurance.

HY: For those people who don't know you, could you tell us a little bit about yourself?

CW: I've been working in specialty insurance for just over 25 years now. My first job in the market was as Head of Marketing and Communications at Lloyd's of London where I spent five years. Since then, I stayed in insurance and ran my own marketing and communications agency for 20 years, and I've been CEO of the London Market Group for the last three years.

HY: How has your previous experience in the London insurance market prepared you for your role at LMG?

CW: Well, some people have found it odd that someone from a PR background is leading a trade association. But a lot of what we do at the London Market Group is about campaigning on behalf of the market, and many of the necessary skills and experience are baked into marketing and communications people. It's about identifying our audience and what we're asking for, communicating in a simple but powerful way, and then doing this consistently over a period of time. So, those skills and experience are within my wheelhouse.

But there are also things I'm doing now, like government lobbying, which I hadn't done before taking this role, so it's giving me the opportunity to learn new skills, too.

HY: Tell me about some of the highlights of working with the LMG.

CW: One of the definite highlights is what we've managed to achieve through our government lobbying. The Financial Services and Markets Bill² was coming into parliament when I started the job, so I was able to see it from the drafting stage through to becoming legislation. I was lucky to work on that and lobby very hard for the things that the London market felt it needed to continue to thrive.

A lot of that was around regulators being more nimble, more measured and more proportionate, and also us getting a secondary objective for growth and competitiveness for them. So that's been a real highlight. I've met many MPs and members of the House of Lords who have been incredibly supportive.

The other thing that I'm really excited about is tackling the talent problem that the London market faces. For around 350 years, we've wondered why no young person has ever said, "Mum, when I grow up, I want to be a property and casualty underwriter!". But we've never really bothered to try and tell the story of why insurance should be a destination career for young people. We've done a lot in the last three years to try and reset that debate and show why this is a great place to work, bring in new people, and really energise the market to look for those diverse sources of talent.

HY: What are some of the changes you've seen since you started your career in the London market?

CW: One of the biggest changes has been the growth in channels that businesses can use to talk to their customers and stakeholders. When I first entered the London market you would send out a press release, typically by courier. Or you could send somebody a letter. Fax seemed like a very exciting invention! But today, it's a fantastic and interesting communications environment for young people to work in.

In terms of insurance, the London market is good at being creative and solving problems. Fifteen years ago, no one knew that cyber was going to be a problem, let alone that cyber insurance would be the solution. But the London market has always solved 'new new' problems, whether that was insuring the first motor car or the first satellite.

What's interesting about how the market has developed is that insurance has shifted from 'a cheque in the post' following a claim to risk mitigation. It's about helping people to get back on their feet. Forexample, when you buy a cyber product now, it's not just about insurance; it's about getting a whole package of support, which is vital if you're a victim of a cyber-attack. That's how the market is thinking about a lot of new risks; how can we help people transfer the entire problem, not just send them money when something goes wrong?

HY: In a world of evolving risk and shocks, how is the market responding and coming up with meaningful solutions for clients?

CW: A lot of the stuff that the market does is to take an existing product and move it into a different industry. So, it doesn't matter if you're building a coal-fired power station or a wind farm — those things need to be financed and built, and the insurances are very similar.

Go back 200 years when fire talk was the biggest risk in London and insurance companies had fire engines!  This is what I mean when I say some of this is 'new new' and some of it is about old solutions with new labels on them. That's the great thing about insurance: we'll have a bit of this and a bit of that, and we can come up with a robust solution.

When you look at something like cyber, you can see where the market can be genuinely innovative. There will always be opportunity where there is a new risk that nobody had previously considered.

The London market has a lot of brains — brokers, underwriters, risk engineers — all working together to solve problems that may not have even existed before.

HY: Is one of the reasons for that approach the fact that we're seeing risks become so much more intangible in nature?

CW: Yes, I think so. There's always been a range of risks on any business's balance sheet that can't be solved by insurance, but the market is increasingly thinking about how to deal with intangible risks to consider the actual amount of risk and the actual trigger because insurance is constructed to have both of those things.

The development of parametric insurance is really interesting because it helps businesses to think about quantification of risk and also about triggers.

HY: So, are we moving more into the realm of risk mitigation and resilience?

CW: Resilience, insurance, risk mitigation — all of these things are converging because people realise the size of the problem. Balance sheets can't just keep taking on business risk ad infinitum. For example, the cyber debate is about how businesses can become more cyber resilient because the consequences of a cyber-attack can be catastrophic. Even a sudden, mass technology failure might mean we are 48 hours away from the world coming to a complete halt! So, people are thinking more about how to prevent these systemic risk scenarios.

HY: What are the biggest challenges for the London market over the next five years?

CW: Cyber has to be one of the biggest issues, then there's climate change and the journey to Net Zero, and how we enable the investment required to build new types of technology — all of these things. But equally, there's a huge amount of existing risk that needs to be dealt with — going back to disorder on the streets of London; properties are getting damaged and people need protection. So, it's not always about seeking new solutions; it's also thinking about the heartland of insurance and how that continues to serve its clients.

HY: I guess part of the challenge as the industry evolves is how to retain the unique qualities of the London market amidst so much change.

CW: That's right, and many businesses have already thought about that; what are they bringing new talent in to do? We see a lot of data apprenticeships, employees being upskilled in analytics and analysis, and more tech people being hired. Take the Ki syndicate at Lloyd's, for example; it's an entirely algorithm-driven syndicate. Most of their employees are in the tech space. They don't need underwriters in the traditional sense; they just need some to have oversight.

The market is ensuring it has the types of skills it needs. But you only have to be in London and go to the underwriting room in the middle of the working week to see that this vibrant community is still alive and well and really serving its clients.

HY: What would you say about the London insurance market to young people coming into the industry?

CW: One of the things I always say to young talent is the London market is a village, and when you understand this, it gives you the opportunity to harness its strength to achieve things. There are 350 insurance businesses in the London market and they're all within 500 metres of the Lloyd's building. That creates a genuinely unique ecosystem where people get to know each other, work together and pool their creativity to come up with solutions for clients. They also pool their capital so they can take bigger risks.

Also, there's a real sense of community where people really enjoy spending time with one another. For example, taking part in joint charity initiatives or organising sporting events together. And if you look at any other sector, particularly financial services, you just don't see that anymore. There's also a great work/life balance.

Essentially, the work itself is always interesting and topical. It doesn't matter what industry sector you're supporting; you'll be working on issues that people see in the newspapers every day. Take the recent rioting in the UK, for instance — there's an insurance angle to that and almost anything else you're reading about. And that's a story we need to communicate better to the next generation.

HY: Is the market getting better at selling itself?

CW: It's getting much better because we're doing an amazing job of attracting talent on behalf of the London market. Unfortunately, though, we are still so bad at using jargon. If there's a three-letter acronym that we can possibly be using, we will! But something I've learned in three years of working with young people is that you have to think like a teacher and not like a professional.

When telling our story, we concentrate unashamedly on the sparkly stuff in the insurance world, whether that's insuring footballers' legs, the Olympics or Taylor Swift's Eras Tour; we talk about things that people relate to. It's hard to make a young person's heart beat faster with stories about large condominiums in Florida. The thing about young people, though, is they grow up, so we have the opportunity to keep getting better at it and keep our foot on the gas in telling a great story.

HY: I suppose at the end of the day, it's also about the economic importance of insurance to get people back up on their feet following a disaster or a major loss.

CW: Yes, I think we've also done a lot to present claims as an interesting career for young people — you know, the detective work that's needed to see what's really gone wrong and to help people learn lessons from it. There's also the social good you can do with communities, individuals and businesses. I think all of that appeals to young people.

The other point I make — and I make this a lot to government — is one of the least known facts about the London market: its size and importance to the UK economy. It contributes 2% of the UK's GDP. For one industry that's an enormous amount. It pays for every nurse and midwife in England for two years. That's another story we've not been good enough at telling over the last ten years.

HY: It sounds like you're really enjoying the lobbying aspect of the role.

CW: Yes, I am, and it's actually really interesting to work with a group of people who don't know very much about London insurance market, which is mostly the case with politicians. I get to explain it to them in ways they understand, tell them what they can do to help us, and what it is we do to help them.

It's a fascinating space, especially at the moment as we've been through prime ministers and politicians like hot knives through butter. And now we're working with a new government — a different shade of political party — and so we have to do that job all over again!

Thank you to Caroline Wagstaff for taking the time to give us a glimpse into her role and the work the London Market Group does for the UK insurance industry.