The State of the Insurance Industry Following Brexit – A Leader’s Perspective – John Shepherd, CEO of Shepherd Compello
The state of the Insurance Industry following Brexit – A leader’s perspective – John Shepherd, CEO of Shepherd Compello.
The driving force behind Shepherd Compello.
John has forged a long successful career growing businesses and developing innovative insurance products across the world.
He is a well-known and respected figure within the Lloyd’s market place, and a passionate advocate of the Build Africa charity.
Q1. What is the status of a deal for the insurance sector?
Much of the mainstream press has been covering what is happening at Dover, in the Irish Sea or to fisherman and small businesses trading in Europe. This is, of course, hugely important to those businesses affected. However, it is worth noting that 80% of the UK economy is driven by services which are not covered by the deal. This includes insurance with the UK being the largest market in Europe – worth over €340 Billion in 2018. There is no longer any passporting arrangement and no deal for financial services is in the pipeline – other than a Memorandum of Understanding for Financial Services. Talks for which are underway.
The UK insurance market is the largest in Europe – worth over €340 Billion in 2018 – but is not covered by the Brexit deal. There is no longer any passporting arrangement and no deal for financial services is in the pipeline.
Unlike businesses trading in goods, it has been pretty clear that that there would be no deal for the insurance market for a number of years. We have been preparing for this scenario since the referendum in 2016.
Q2. How is Shepherd Compello embracing opportunities in Europe?
Europe has always been an important part of our business and we were investing long before the referendum in 2016. It was more a case of stepping this up since then and one of the things we did was to set up our Netherlands Company. It has allowed us to continue trading compliantly with our EEA clients. We already have an amount of business in the Netherlands and across the EEA and we are completing deals in Sweden, Ireland, Spain and Italy to name a few with plans to expand our office staff and increase local knowledge in the coming months.
Q3. How is the insurance sector more broadly adapting to Brexit?
We have seen insurers move London operations to develop local networks across Europe. From a cost and logistics perspective this is understandable. There is inevitably a knock-on effect for Lloyd’s potentially losing out even with its new Brussels company. As a result, Lloyd’s will need to be nimble, light on its feet and reinvent its marketplace differentiator status. This is nothing new as vanilla risks have never been Lloyd’s strength. The big insurers prefer the cookie cutter risks and Lloyd’s has the opportunity to write emerging and challenging risks on a subscription basis.
It is interesting and refreshing to see how Lloyd’s is adapting – which has accelerated as a result of the pandemic. They are going through a programme where they are engaging with stakeholders, describing it as a once in a lifetime opportunity to contribute to the design the future of the underwriting room. It is this kind of thinking and approach which is required across Europe.
On a broader scale organisations such as the London Market Group (LMG) have been educating and lobbying to secure a post departure deal. Also, the ABI has stated that it will continue to press the importance of reinsurance and insurance equivalence for the London Market. They are also lobbying for the insurance element of the Memorandum of Understanding for Financial services which will be important in shaping how the EU and UK services relationship evolves in the future.
Q4. How should brokers be responding to the challenges ahead?
Ultimately, for any firm to succeed everything comes back to putting the client first. This requires developing the expertise and understanding to embrace everything from the language and cultural differences to the ways we trade.
Right International have a proven track record of identifying and sourcing the top talent across various niches of the insurance market. If you are looking to add to your team now or in the near future, I would welcome the opportunity to help – please contact me.
If you have any ideas for future articles and would like to be involved, please let me know and I would welcome any feedback.
Please look out for more leadership blogs coming soon!
All the best,
Gary Pike
Founder & MD
Right International Insurance Headhunters
