The market mythbuster

Lloyd’s offers more opportunities than is often understood and is fostering innovation, its chief commercial officer says

By Wendy Pugh

Demystifying Lloyd’s is part of the job for chief commercial officer Dawn Miller as she sets straight misconceptions and underscores the storied marketplace’s evolution and focus on the future.

Ms Miller – also chief executive for the Americas – says Lloyd’s is more accessible to insurance sector participants around the world than is often expected and offers many avenues to assist those seeking to cover risks.

“There’s a perception of needing more doorways to go through to get to Lloyd’s, or it’s complex etc, and those are just perceptions, it’s not the reality,” Ms Miller told Insurance News during a recent visit to Australia. “There are multiple ways to participate in the market.”

Ms Miller’s aim is to ensure everyone operating in commercial and specialty insurance or reinsurance sees the value in Lloyd’s – whether as an investor,  insurer, innovator or distributor.

Globally, Lloyd’s gross written premium rose 6.5% last year to £55.5 billion. The combined operating ratio deteriorated to 86.9% from 84% due to hurricanes Milton and Helene, plus the Baltimore bridge collapse. But excluding large losses, the ratio improved to 79.1% from 80.5%.

Australia is Lloyd’s third-largest international market after the US and Canada, accounting for about $5.2 billion in premium last year. It is strategically important and provides diversification from northern hemisphere risks.

Ms Miller sees further opportunities in Australia following a doubling of Lloyd’s GWP over the past decade, with significant growth in premium and breadth of coverage anticipated over the next five years.

On the reinsurance side, Lloyd’s has worked closely with the government-backed terrorism pool, it underwrites primary complex risks in sectors such as mining, energy, infrastructure and transportation, and its capacity is increasingly sought by underwriting agencies, often covering speciality and niche risks.

Ms Miller says the number one focus will always be performance and on ensuring those coming into Lloyd’s understand their own markets and have a strong track record.

“We have a duty to ensure we protect those who have invested in Lloyd’s and a duty to the end clients who we, at some time, may … need to pay claims for. Those are our duties, so to ensure we can fulfil those duties, we have to focus on performance.”

Locally listed insurance companies have reported a slowing in the pace of premium rate gains, particularly in the commercial arena, as cost pressures have eased, sparking discussions about whether the pricing cycle is turning downwards.

Ms Miller cautions against “talking ourselves into a softening marketplace”, given price increases are still being achieved, as shown in the latest Lloyd’s results.

“There are certainly some lines around the world where there’s more capacity, and therefore the pricing is coming down, but what we have to watch is that we all don’t have some sort of ‘the sky is falling’ moment, if you will,” she says.

Terms must be appropriate for the conditions the sector faces, she says. The world is experiencing geopolitical and macroeconomic uncertainty and a changing climate, and insurance is in demand.

“There are still major risks out there that need to be addressed, and we’re barely scratching the surface.”

Ms Miller joined Lloyd’s in 2022 after more than two decades in the insurance sector, including leadership positions at insurers Chubb, Axa and AIG, and broking group WTW.

The pathway to insurance emerged after studying politics at university with an eye towards a government role and the international arena.

“I had the classic summer internship at one point at a brokerage, and then I went to work for the US government for what was then called the OPIC, the Overseas Private Investment Corporation, then started out in political risk insurance and went from there,” she says.

Ms Miller started her career in Washington and has held positions in London, Houston, New York, San Francisco, Paris, Dubai and Zurich. With the dual global and Americas Lloyd’s roles, taken up last September, her time is often split between New York and London.

Chief commercial officer responsibilities include market development, engagement with key trading partners and new entrants, and involvement in strategy and innovation. About 60% of the market’s premium comes from the Americas.

Lloyd’s – which dates back more than three centuries and has covered landmark tragedies such as the sinking of the Titanic and the 1906 San Francisco earthquake – has pursued modernisation to ensure it is not resting on its reputation or encumbered by its weighty past.

“Anything with such a long history and a deep history always risks its own myths being created and then constantly repeated,” Ms Miller says.

“We are constantly evolving our platform, constantly evolving the marketplace, whether it’s how we engage with managing agents, whether it’s how we evolve through mechanisms like London Bridge Two, which allows different capital to come into the marketplace in a more agile fashion.”

The marketplace comprises more than 50 leading insurers and about 80 syndicates, and collaborates with a network of more than 3000 brokers and coverholders. Ms Miller says it offers opportunities to diversify access to capital.

“I believe that all the world’s great underwriters should be operating on the Lloyd’s platform, not as a substitution for their other businesses, but in complement as a strategic tool for them.”

Lloyd’s is taking a lead on innovation, Ms Miller says, building on a pioneering history that includes writing the first motor and aviation policies and moving to address political risk and cyber threats.

More than 140 companies have gone through the Lloyd’s Lab insurtech accelerator program since it was set up six years ago, with more than $US1 billion of capital raised.

“Of those companies, 95% are still operating in the insurance market somewhere and about 87% or so are operating in the Lloyd’s framework, whether as a service provider or a risk-taking entity, so I think that’s a phenomenal track record,” Ms Miller says.

“We are very, very dedicated to creating an environment that not only accelerates those companies but provides an environment for those alumni to continue to thrive.”

A decade ago, Lloyd’s launched its Dive In festival for diversity, equity and inclusion (DEI).

The event began in London with 100 people before expanding internationally. Last year, 45,000 people participated and sessions took place in 53 cities.

The festival will continue this year, even as attacks on DEI in the US under President Donald Trump raise concerns.

“I think what’s important is the environment that we engage in, that we curate, represents the client base that we have, so we’ll always be dedicated to that,” Ms Miller says.

“As we do with any [government] administration around the world, we’ll continue to work with them and demonstrate the value we bring, in that case to the American economy.”

The search for talent is as much a challenge for Lloyd’s globally as it is for the insurance industry in Australia, which has sought to draw from a wide pool to gain candidates.

Ms Miller says a broad spectrum of ideas, skills and perspectives are needed and the industry must work hard to nurture and retain the best talent and promote the fulfilling career pathways available.

Growth of insurance as a percentage of GDP is increasing as more risks are addressed, and Ms Miller says it is “an incredible industry that helps the world propel forward”, with Lloyd’s as one of the most trusted brands.

“You can’t take risks, you can’t innovate, you can’t build, you cannot learn, you cannot educate without someone sharing that risk with you, and we have a robust marketplace globally that is only growing.”