The insurance industry will enter a brave new world following the unprecedented events of 2020.
A TRANSFORMED WORLD
A devastating bushfire season put the impact of climate change into sharp focus and the global pandemic looks set to transform the industry from both outside and within.
However, Chris Mackinnon, Regional Head of Australia & New Zealand at Lloyd’s and its General Representative in Australia and Vanuatu, says these are just some of the challenges facing the industry — and overcoming them requires new ways of thinking, fresh talent in the industry and a willingness to help them grow.
‘Developing and mentoring new talent in the industry is one of the most important — and one the most difficult — challenges we face,’ he says.
One of the panel speakers at this year’s ANZIIF General Insurance Virtual Breakfast, Mackinnon will join other industry leaders to discuss areas of change and opportunity for the industry as well as what the future may hold.
Mackinnon has worked in the insurance industry for more than 30 years, principally as an insurance broker, and has extensive knowledge of both the Australian and London markets.
He joined Lloyds is 2015 and is responsible for market development, and for liaising with market practitioners and regulatory authorities to maintain and grow Lloyd’s presence in Australia, New Zealand and Vanuatu.
GENETIC DISPOSITION FOR INSURANCE
Mackinnon says a career in insurance was a natural choice.
‘I guess you could say it was a genetic disposition,' he says.
'My whole family has been in insurance for five generations and so for me, it was a considered choice. I had a pretty good understanding of the industry from a young age, and I was attracted to the extremely diverse nature of the industry, and the impact that it has on society.’
Attracting and retaining new talent to the insurance industry requires a delicate balance, says Mackinnon.
‘How do we ensure that new joiners in the industry are given the opportunity to learn from the experience of others?’ he says.
‘However, on the flip side, there is a real opportunity in this new environment for fresh thinking and new perspectives.
'Learning how to do things the way they have always been done is not necessarily the best way.’
LEARNING FROM NEWCOMERS
Mackinnon believes even the most experienced industry professionals can learn from newcomers — and he says this should be encouraged.
‘Reverse mentoring, and encouraging original thought in our emerging talent pool will enable us to stay in touch with the changing risk we face,’ he says.
In addition to his role at Lloyds, Mackinnon is Non-Executive Director of the Insurance Council of Australia and has been an Associate Director of the Underwriting Agencies Council (UAC) for more than five years.
‘As the representative body for agencies in Australia, the UAC is a critically important body to ensure that the interests of members are protected and represented, especially given the tsunami of regulatory reform that Australia is facing.’
Mackinnon explains that Lloyd’s Australia is the principal strategic underwriting partner of the UAC, and the agency distribution space remains critical to company’s success.
‘Globally, we have around 4,000 Coverholders who, between them, account for around one third of our global premiums,’ he says.
‘In Australia, business written through our Coverholder network accounts for almost two thirds of Lloyd’s total premium for Australian domiciled risks.’
Diversity of thought is also vital to the future success of the industry, says Mackinnon, who has chaired the organising committee for the Dive In Festival for Australia and New Zealand for the past five years.
The Dive In Festival promotes diversity and inclusion in the global insurance industry and takes place over three days in September.
Mackinnon says that while the insurance industry has taken significant steps to improve diversity and inclusion across the profession in recent years, there is still ‘plenty of work to do’.
‘The reality is that we were coming off a very low base,’ he says.
MAKING A SUCCESSFUL CHANGE
Mackinnon believes change requires genuine commitment.
He cites the example of Lloyd’s gender targets that include 35 per cent female representation in leadership positions across the market to be achieved by 31 December 2023.
‘In the Corporation, we have achieved near parity in less than two years. We are all the better for it, and 47 per cent of Lloyd’s leadership roles are now filled by women, proving it is achievable.’
However, greater representation of women in the industry is just one way to promote diversity, says Mackinnon.
‘We have also resolved to improve the experience, level the playing field and increase the representation of black and minority ethnic talent in our market, including confirming our intention to set a market ethnicity target in Q2 2021, he says.
This may seem like progressive steps for the world’s oldest continuously active insurance marketplace, but Mackinnon says much of Lloyd’s success comes down to embracing change. He adds that innovation is part of its DNA.
'From the first motor policy to drones and driverless cars, our product innovation, insight and expertise has been built over centuries to create a market that fosters a braver, more resilient world,' he says.
However, Mackinnon adds that Lloyd’s has prioritised market modernisation initiatives in recent years to ensure it remains relevant in its approach.
‘We champion technology innovation and talent through initiatives like the Lloyd’s Lab, which is based in London,’ he says.
‘It helps to connect the brightest and best talent from the technology sector to Lloyd’s capacity and helps to develop new ideas, new ways of working and of serving our customers.
'We want to harness this creative spirit to help us build a new Lloyd’s, which is nimbler, more customer focused, faster and more efficient than ever.’
EYE ON THE FUTURE
An eye on the future also helped Lloyd’s adapt to the unprecedented shocks of COVID-19.
Despite operating as a face-to-face trading floor for centuries, it quickly transitioned to a virtual marketplace and Mackinnon says there was no significant impact to its ability to service the needs of customers.
‘As we move forward, we will continue to challenge ourselves to embrace new and emerging technology and solutions to maintain and enhance our global position and reputation.’
A LOT TO LEARN
Risk took on a whole new meaning this year. Mackinnon believes there is much to be learnt and will touch on some of these lessons during the General Insurance Virtual Breakfast.
‘After 30 years of wearing a suit, and working in a structured 9-to-5 office environment, I can see the impacts of COVID-19 transforming the world of insurance faster than I ever thought possible,’ he says.
‘Truly global risk, with no geographic boundaries, on such an unprecedented scale is already redefining our thinking about new and emerging risks, management of capital and exposure, and horizon scanning.’
As the world outside of insurance continues to change, the industry must adapt its own practices to keep up, says Mackinnon.
‘Greater flexibility has been afforded by the necessity to fast-track working from home during COVID-19,’ he says.
‘And performance metrics are now measured more by output than input. These factors will fundamentally change the industry, and our way of working.’
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