Insurance – one of the best kept secrets of the UK’s financial services history
Last week I went for after works drinks within the City of London with a friend who does not work in financial services.
He expressed surprise at the upbeat nature of all the people in the glossy bar, the tabs filling up with bottles of wine and champagne and the general feeling of affluence in the place.
“I thought the City was on its knees?” he said. “Ah. But that is the other bit of the City,” I said. “The banking bit across Gracechurch Street. In these four or five streets where the insurance market lives, things are flourishing.”
I had to explain that this is one of the best kept secrets of the UK’s financial services history. The insurance sector – long the poor cousin of the City – is doing rather well for itself, and is trying not to smirk too much at suffering of the bankers, who have for decades made jokes about the quality and qualifications of the people working in insurance.
I had to explain that there is another kind of insurance, not just the car insurance and home insurance, but the kind of insurance that covers complex risks, and explain what reinsurance was (and no he did not drop off to sleep but was genuinely intrigued).
I remember at the Rendez-Vous in Monte Carlo last year, I made a comment on how many bankers were in town for the September gathering of the global reinsurance industry. One executive quipped with a grin on his face: “Well… it is the last place where they can drink champagne in public.”
Also, I said to my friend, if you need more evidence of the boom, just look at the two half built skyscrapers – the Leadenhall Building, known as the Cheesegrater, and 20 Fenchurch Street, also known as the Walkie Talkie. WR Berkley’s also recently unveiled plans to build a 38 story tower on the corner of Lime Street and Leadenhall.
There is little doubt that in the current climate, all the offices will be filled with prospering insurance companies, and the companies that serve them, desperate not to move out the golden triangle of Leadenhall Street, Fenchurch Street and Gracechurch Street. (In contrast, just look at the Heron Tower a few blocks north – it seems to be just that bit too far away, which is why it seems to be struggling to let all of its offices.)
Why isn’t there enough PR around insurance?
Well, back to my friend. “How does no one know about this?” he said, quite genuinely shocked that such a “good news” story was not regularly reported in the press. “Ach, insurance is boring…”
Does insurance and reinsurance need brand awareness?
But the answer is more complex than I quipped back at him, in a bar roaring with the sound of a Thursday night. On a scale of who shuns publicity, reinsurance and non-retail insurance companies are second only to hedge funds. They are, generally, not really into “brand awareness”, hardly advertise and often do not see the value in the kind of public relations or lobbying that would raise the profile of the sector.
The industry is also fragmented, with no strong voice that speaks for the general or wholesale insurance and reinsurance sectors – either locally or globally.
This leads to all sorts of problems with image that have various ramifications for the industry. Would the slow rolling stone that is Solvency II really have been put forward if there was a strong voice? Would the insurance sector be generally despised so much if it was better understood? Would the brightest of our graduates not be banging the doors down to work in this little haven?
A strong voice would have many benefits, and over the years, many executives have spoken about this. But, then, you take a closer look at their own company’s communications, and you will see that sometimes they do not practice what they preach.
But there is a lot to celebrate – not just the value of what insurance brings to global GDP – and the industry needs to get better at this or, amongst other challenges it will face, it may lose out on the bright minds of the future who will go into other careers instead. Simply put, the industry needs better PR and brand awareness if it is to reach its full potential.
“I wouldn’t mind working here,” said my friend. “It looks like fun.” And it is. Maybe, without strong lobbying or PR, we just have to make one convert at a time…
