LONDON: While many London Market participants began 2020 generally optimistic on the back of signs of pricing improvement, the COVID-19 pandemic has cast a shadow over performance expectations for the rest of the year. It has also thrown a spotlight on the market’s modernisation efforts and might even accelerate some long-awaited changes to the way business is transacted.

AM Best’s new report, “COVID-19 Throws Spotlight on London Market Modernisation”, considers the expense and distribution pressures that are forcing London Market insurers to adapt their operating models in order to remain relevant in a competitive marketplace. Radical action has been evident at the individual company or managing agent level, as well as at Lloyd’s.

Catherine Thomas, senior director, analytics, AM Best, said, “The London Market deals with complex and bespoke business with transactions often negotiated on a face-to-face basis. However, the current situation is forcing individuals and companies to be more thoughtful about the circumstances where in-person interaction might not enhance value, and could be done much more efficiently electronically.”

The report adds that the pandemic has thrown into sharp focus the market’s modernisation efforts and has demonstrated that the progress made by individual insurers on this journey could be a real differentiator.

“It is clear that some in the market have been much more able to make a seamless transition to the new way of working,” Thomas said. “Remote working is forcing a long-needed culture change in the acceptance of digital solutions.”