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Sean McGovern

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CEO, UK & Lloyd's market

Our industry is changing. There’s a greater use of technology, an increased need for data and analytics and a rapidly evolving risk picture for our clients. As the UK risk community faces up to the potential talent gap, Sean McGovern, CEO UK & Lloyd’s at AXA XL, discusses the role that learning and development and people planning will play in helping London and the UK insurance market to retain its preeminent position as an innovative and creative marketplace and adapt to new ways of working, new technology and new client risks.

The UK risk community is facing a looming talent gap as a generation of experienced underwriters, claims professionals and risk experts nears retirement. In recent years, it’s made – and continues to make – great efforts to attract millennials and Generation Z-ers to its ranks; however, still more needs to be done.

There’s a wealth of knowledge and experience in our market, but our world is changing and the skills needed to meet our clients’ evolving risk demands are changing too. There’s a greater emphasis on data and analytics, a greater use of technology and the need to harness the opportunities that technology can present – both for business in general and for insurance in particular. The challenges faced by risk managers are evolving too; they also need to develop new skills to mitigate, manage and transfer new and changing risks.

The insurance market is poised for change and we need our colleagues to be able to lead that.

London in transformation

This is particularly true for the London market, which faces the challenge of retaining its preeminent position as an innovative and creative marketplace while adapting to new ways of working, new technology and new client risks.

In 2019, the London Market Group – a market-wide body representing underwriters and brokers from across the Lloyd’s of London and London company insurance and reinsurance industry – published a report [1] on the future of skills in the London market.  The report, which was published in association with consultancy firm KPMG, recognised that the market is at a skills shortage “tipping point” that cannot be ignored.

It also noted that the London market was on the brink of fundamental change as it began the process of digitisation. Further innovations like artificial intelligence, robotics and Big Data are also set to make a big impact, the report noted, and indeed we’re seeing the impact of these innovations in our own business already.

To address the potential skills gap, the report says, organisations within the London market need to be flexible, and to create agile cultures that are nimble, promotes flexible working and the conditions that enable projects to be launched quickly.

Smarter working

The COVID-19 pandemic – and the enforced move to remote working for many of us during the periods of lockdown – accelerated a change towards more flexible ways of working. At AXA XL, we have this autumn put in place a fully agile working culture that enables colleagues to work flexibly while promoting the power of collaboration. This new way of working will enable us to maximise our individual and collective performance through a culture of accountability, trust and empowerment.  We call it Smart Working.

Tackling some of the “old-school” ways in which our market has operated – for literally hundreds of years – is an important step towards making the insurance and risk industry more attractive to new entrants. But it will not be enough to address the talent gap we’re facing and to position our market for the future.

We need to find strategies to attract people with different skillsets and backgrounds to our industry. But we also need to harness the broad base of skills already present in our market, to help our colleagues to upskill and to reimagine their career paths to encompass much more risk insight, data analytics and client-centricity.

This goes both ways. We have a great deal of expertise, knowledge and experience within our market. At AXA XL, we’re lucky enough to have experts who are always keen to impart their knowledge and participate in both structured and ad hoc training. And these experts are keen – and able – to learn from new entrants to the industry too. We all actively learn from the presentations our graduate intake gives us, for example, and from the skills those young people – or recent industry entrants – bring to the table. It’s important to us, and for our insurance market as a whole, to foster a culture of learning at every level.

Continuous learning and development is vital. Indeed, it has always been vital for the London market, which thrives on creativity and addressing the most complex, emerging – and sometimes esoteric – risks.

Strategic thinking

At AXA XL, learning and development is key to our future success. We consider our people plan to be hugely important to the way we do busines – and the way that we’ll be able to respond to our clients’ ever-changing risk needs. Just as companies have financial plans and strategic plans – which are reported on quarterly – so the people plan should be a key part of a business strategy.

There are several key factors that feed into our people plan here at AXA XL. To be the best at underwriting property and casualty insurance we need to partner with our clients to enable us to provide effective, on-demand solutions to their risk needs. This means we need colleagues who are able to evolve ideas quickly, to understand risks, think creatively to devise solutions and do so fast and efficiently.

We need to respond to disruption – both for our clients and for us – that is transforming our industry and we need to be disruptive in our thinking. That all requires colleagues who are agile, curious and think differently.

Driving Inclusion and Diversity is a critical business priority for us and for the wider industry.  Truly addressing this talent gap can only come through attracting people with different perspectives, backgrounds and experience.  By doing so, well also be more reflective of the society we serve.

Market-wide drive

A recent survey[2] by consultancy firm Accenture found that six in ten UK insurers considered training to be their top priority for the coming months. It is certainly a business imperative for us and for many of our peers.

But this cannot be done in isolation. The ecosystem of our market requires that we have not only talented underwriters, claims specialists and risk engineers in-house, but that we’re able to work with talented brokers, lawyers, advisors, reinsurers and risk experts across the spectrum.

This year, we launched our UK Broker Academy – an initiative aimed at identifying, nurturing and training the next generation of insurance gamechangers from across the London market. The programme is interactive and enables the high-potential individuals nominated to take part to explore three major topic areas: The Best You; The Market; and The Power of Collaboration. The first cohort of talented brokers “graduated” this summer and today remain matched with their respective mentors from AXA XL.

We recognise too that our clients’ businesses are changing and that they too have learning and development in risk at the top of their agendas. That is why we’re partner of the Airmic Business Excellence Programme – designed for risk professionals who are ready to use a foundation of professional experience and qualifications to move forward to the next stage of their career. I’m excited to be speaking at the Airmic Business Excellence breakfast this month and I look forward to hearing the thoughts of fellow attendees and deepening our engagement with the up-and coming generation of risk leaders.

What next?

Our market is already taking positive steps to address the talent gap, improving inclusion and diversity and to make learning and development a key prong of business strategy. But there is still a great deal of work to be done.

I would urge companies across our marketplace, be they large or small, to make the people plan a part of the business plan. Change is happening across our industry and we need to ready ourselves – now. We need to find ways to attract dynamic thinkers to our marketplace, to recruit people with new skills, with a deep understanding of data, analytics and emerging technologies. We need to recognise too the enormous wealth of talent we already have in our industry. We must harness the experience and skills of those colleagues we already work with and give those colleagues the opportunity to train in new skills and develop their attributes.

Our society faces new and evolving risk challenges. Global issues such as climate change, pandemic and cyber risk demand our attention. Risk managers have an exciting opportunity to take a position at the forefront of the drive to help embed good Environmental, Social and Governance plans in their organisations and to work with us in the insurance industry to find solutions to these pressing issues.

And as an industry we have a vital role to play around issues such as climate change, in particular; both by supporting our clients and local communities in tackling the immediate impacts of climate change and – through the work being done within the London market and Lloyd’s – by helping to create climate resiliency around the world. This is an opportunity that we cannot afford to miss.

As we begin to emerge from the strangest of times, let’s make sure we seize the opportunities to adapt to the changes taking place in our industry and in the wider world to truly move from being a payer to a partner to our clients.

1.LMG/KPMG. The future of skills in the London Market. 2019, available at https://lmg.london/wp-content/uploads/2019/07/The-future-of-skills-in-the-London-Market-LMG-KPMG-web-accessible.Final_.pdf

2. Michael Costonis. 'Attracting and retaining talent in a challenging P&C insurance industry', available at https://insuranceblog.accenture.com/attracting-and-retaining-talent-in-a-challenging-pc-insurance-industry

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In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
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