Charting New Territory: Positioning the UK (Lloyd's) in a changing global reinsurance landscape

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Despite a long history of success as a main financial centre for buying and selling reinsurance, Lloyd's of London and the UK market more broadly, now faces major challenges arising from changes in the global landscape. These changes include technological advances in information distribution, regulatory demands for transparent capital allocation, growing competition from other mature markets, consolidation in the insurance and reinsurance markets and increasing global demand (and associated losses) from emerging markets. As a result, many UK companies are not only accessing global reinsurance business in the London market but also establishing subsidiaries in other markets, seeking to develop their understanding of emerging markets, and striving to develop relationships with an emerging group of global cedents that are changing the way that reinsurance is bought. However, they have few frameworks or evidence-based insights to inform them about the scope of global change or its potential implications for their own business models. The primary aim of this project is to co-produce and implement a knowledge exchange programme with UK insurers, reinsurers and brokers that will support them in developing greater competitiveness. A secondary aim is to ensure that UK-based players lead discussion of these important topics in the wider global reinsurance market. We will meet these aims by exploiting a rich qualitative data set that has been collected by Professor Jarzabkowski and her research team since August 2009, in collaboration with an industry partner, the Insurance Intellectual Capital Initiative (IICI), on the reinsurance trading practices of the global reinsurance industry from the perspective of reinsurance sellers (reinsurance firms) and their intermediaries (broker firms). In 2011, this study was expanded, with support from the IICI, to also cover reinsurance buyers (insurance firms). This has resulted in a unique global data set of 414 interviews and 738 observations of reinsurance trading in 21 reinsurers and 3 broking firms in the main reinsurance placement markets of Lloyd's, Bermuda and Continental Europe), and 33 cedents in 17 countries, covering a range of mature (e.g. USA, Australia, Western and Northern Europe) and emerging markets (e.g. Central and Eastern Europe, Russia and India). We will use the entire global data set to develop specific segmentation and diagnostic analyses for reinsurers, brokers and cedents that will inform UK industry participants about their own positions in the global industry. These analyses will then be transformed into accessible knowledge outputs for the UK industry through a series of ten Masterclasses, of which seven are tailored to one of the key industry participants - insurers, reinsurers and brokers - and three offer integrative perspectives on key topics of concern for the whole industry.Each Masterclass will comprise i) a practical case paper of 10-12 pages with specific frameworks; ii) an interactive industry workshop to develop the material collaboratively into a practical and applied resource; iii) tailored exercises for industry participants; and iv) a 20-minute podcast with slides to accompany the case and exercises. These resources will then be published on a dedicated website to make them freely and permanently accessible to broader, global audiences and foster training and development in the industry. Taken together, these Masterclasses form an integrated series that addresses a number of the main challenges facing the UK (re)insurance industry in the current global environment and will equip practitioners with a suite of tools and resources to tackle these challenges. The interactive format for their dissemination, outlined in the Impact Summary, will encourage reflection and debate on these key issues and enable UK industry practitioners to stay at the forefront of changes in the global industry.