London Market ‘will never go back to how it was’ following Covid-19 pandemic

The London Market “will never go back to how it was” prior to the Covid-19 pandemic, however the industry will need to be conscious of how to marry the sector’s foundation of personal relationships with the technology that is now making remote working commonplace, said DAC Beachcroft partner Toby Vallance.

Vallance told Insurance Times that although technology has physically enabled the practice of remote working, the reason it has flourished and been successful during the national lockdown is because it is “based on pre-existing relationships, which were established when we could all meet face-to-face”.

He explained: “The London Market [and] the Lloyd’s market is all about personal relationships and face-to-face; it’s what it’s built upon. How you marry and balance that with [the] use of technology is something that will have to be worked out going forward. I think when we can go back to some sort of normality, that will be a relief for the market.”

For Vallance, there is also the question of sustainability if remote working is here to stay post-pandemic.

“The question is, going forward, while we are able to function remotely without being able to maintain and develop new relationships, which generally only happen face-to-face, is it sustainable? I think there’s a balance to be met,” he said.

“[Covid-19] has accelerated the evolution of the use of technology in the London Market. It’s forced it to be tested in a more significant way than anyone would have ever allowed in normal circumstances. So, we’ve jumped ahead a few years and I think that is a good thing and it’s something that needed to happen.

“Covid-19 has produced an acceleration of the evolution of technology, but it won’t change the fact that the market is developed and relies on personal relationships. But how does this work going forward? Establishing relationships is important, but we don’t need to be in the office five days a week.”

Reduced footprint

Vallance added that Lloyd’s and the London Market “will never go back to how it was” – instead, “there will be this balance to be met with using technology, electronic placement systems but also just generally communicating”.

He continued: “I think there’ll be less face-to-face meetings. There’ll be less travel. There’ll be less use of office space - people will reduce their footprints in the London Market because they recognise that it’s not necessary for everyone to be there every single day of the week. I think what you’ll find is people will work from home or away from the office more and go in specifically for set piece events and meetings, but there’ll be a lot more consideration about whether attendance in person is important.”

Lloyd’s plans on re-opening its doors on 1 September, albeit with some revisions to accommodate social distancing. This includes the market’s capacity shrinking to 45%, compared to the hustle and bustle of the 5,000 professionals it usually houses.

Other measures being undertaken include clear screens on underwriting boxes, deep cleaning every 30 days and voluntary temperature checks. Two entrances and exits to the building will be used, as well as one-way systems and queuing. Although escalators within the building will operate as normal, only two passengers will be able to use the lifts at any one time.

Lloyd’s is also working on a rota to help manage capacity in its underwriting room; the market will also introduce booths for video calls and an IT helpdesk on the ground floor. It is also testing a new platform designed to connect brokers and underwriters.

Insurer Beazley has already confirmed that it plans to reduce its presence at Lloyd’s.

Lastly, Vallance said that although many insurers are renewing business via electronic placing during the pandemic, “there hasn’t been a lot of scope for new business because everyone’s used to doing that in person”.