Lead, Follow, or Fall Behind? Positioning for Success in the Insurance Market | Greg Brown

There is a lot out there where this myth of expertise is a myth. Now, am I saying that the London market is living on a myth? Absolutely not. There is genuine expertise. And actually, one of the things we find particularly interesting is that what people think they do when they underwrite and what you codify doesn't always end up being what they actually do. And actually what they actually do is better. Hello, my name is Juan De Castro, and you're listening to Making Risk Flow. Every episode, I sit down with my industry leading guests to demystify digital risk flows, share practical knowledge, and help you use them to unlock scalability in commercial insurance. Welcome, everybody, to another episode of Making Risk Flow. Today we're going to deep dive into the London market future and its transformation. And I'm joined by Greg Brown, one of the partners at Oxbow Partnership Partners. Many of you will know Greg Oxbowl Partners is very well known for the LMA white paper. Today we'll touch on the white papers and some of the takeaways, but also we'll discuss what has changed since the release of that white paper a few months ago. So, first of all, Greg, really nice to have you. Thank you for joining today. Thank you for the invite. I really appreciate it. Just by way of a quick addition to the background. So, yes, we're a strategy advisory firm. We focus only on insurance, which we think is really important, that particularly insurance has a lot of nuance to the market and there's a lot of understanding all the intricacies. And we think that's important, that that's a core feature of what we offer our clients. And as you mentioned, kindly, we've done a couple of reports in collaboration with the lma, very much commissioned by them, supporting them on the writing of the materials and the research. And actually, if it's okay, I might just dive in to set a bit of a scene because obviously that's core to what we're doing here. So the two main reports we've done, it's over the last 18 months. Time flies when you're having fun. And the original report that the LMA asked us to help them write was on enhanced underwriting. And our original brief was actually, we've talked about enhanced underwriting. People are really interested in it. No one can really define what it is. So can you help us do that and then say what it means for the industry? So that was back in November of 2024 when that was released. Quickly after that point, the market was starting to say, what does this mean for leadership? And I'LL dive in a bit in a minute. What does it mean for leadership? How does that evolve? Will we still need the lead follow part of the market? And then that led to the report that we did and launched again with the LMA in February of this year specifically on lead follow and the role of lead versus follow. So that's the context. Fantastic update of the report, uptake of the report. People really seem to find them fascinating. Everyone seems to be absorbing into their strategies and even partners in the US maybe who have less involvement in the London market. Just looking at the way London market is evolving rather than necessarily just our reports and saying, actually, what does this mean for how our world is changing? And if you have to say, what are the takeaways of Lab, let's start with that lead follow report from only a few months ago on the lead follow architecture. What are the takeaways from that report? So very similar to the enhanced underwriting report where broadly we divided things into a couple of buckets. So one was just defining what it is, two is saying how would you describe in more detail what does it mean? And then third one is what should people be doing as a result? For the first one, the first question was what is a leader in the market? What is a leader in the London market? What defines leadership? And we very quickly found out that actually leadership is not a technical thing. There are technical leaders, leader on the slip, Lloyd's lead, etc. But actually if you're talking to people about what makes a leader, it's much more, more qualitative than it is quantitative or specific or technical. So we defined a spectrum of leadership, in fact leadership all the way from true lead to follow. But I'll focus on more on the leadership part a little bit. We start with what we've defined as true lead and we split those into two. So one of them is a leader that is a genuine full service lead. They put down big lines, they have full service wrapper around it and a very well known brand product coverage. They lead a lot. There's a lot of breadth across product classes within classes. So that's the full service lead. Another true lead is a niche lead. So they're not necessarily providing all of that service and not necessarily the line size, but within the area that they are focused on, particular segment of downstream energy. Maybe be an example, they are recognized for absolutely a being very much the people to follow in that market. The books of business may not be enormous in that space, but people go, if they're on it, then it must Be a good risk and I really want to follow them. You then get into what we call capacity lead. Capacity lead is you're a technical lead. So on a piece of paper somewhere it says, or hopefully online nowadays it says lead. But actually fundamentally there's anyone coming to you and saying, well, your underwriting experience is particularly forward thinking. You're kind of renowned for picking good risks. Not really. Are you changing terms, wordings? Not really. You're up the stack a bit. That's a capacity lead, which is an important role to play. But you need to be careful about how you structure how you think about it. And then you have interfollow a similar thing. You have portfolio followers who are respected for leading thinking in following all the way through to capacity follower. And again they're just kind of putting money at the back of the slip. And it's again, it's a very important role, but it's a different proposition. And fundamentally you have to invest more in time and effort to be at the front. And there's kind of less intense structural cost within the model being at the back because this is much more about respecting other people and following it. So that's fundamentally the structure. And then we talked a bit about what are the categories of a leader. We talked about leader fees. Lots of chat about that in the market. Long story short on that there's no consensus on whether they think it's. People think it's a good thing. Leaders tend to want leader fees because they get paid for them and followers tend not to want to pay them. There's lots of the legality around that. So that's broadly what we were talking about and setting a kind of a direction for the bidth of the market in two ways. One of them is answering some questions that kind of went round and round a little bit. There's a few people in the market that says thank you for putting that conversation to bed. Leader fees. It's like actually, let's just not talk about it as much. And there are other aspects where people can use it strategically in terms of okay, do I have the capabilities of a leader? So those archetypes make a lot of sense, but you've explained it really well. What are the fundamental differences between them? So I assume if you're following in a given line, so if you imagine you decide you're a follower in a given line, obviously you want to follow mostly true leads rather than capacity leads. Right. If you worry about risk selection. Right. You want to probably have a very efficient way of following true leads. Where if you're following a capacity lead, you probably want to do more underwriting and more risk selection. So what is the consensus in the industry of who is a true lead versus a capacity lead? It's interestingly, leadership is more described by how people would describe it actually, rather than necessarily hugely objective criteria. I'd also say I don't entirely agree with your premise that if you're a follower following a capacity lead, you'd necessarily want to do more underwriting because actually they're often in the capacity lead structure. There are other leaders in the chain, they're just not necessarily the Lloyds lead as an example. So you can look ahead, you can kind of jump over to an extent the capacity leader to say, well, actually, who is really at the front, who is really setting the terms, who's really in control? And do I trust what they're doing? Do I believe they're putting the right level of scrutiny into it? There's also a bit of a balance in terms of capacity leader. They do need to scrutinize the risk. It's just they're not necessarily demonstrating leadership in sense of driving the market, driving the direction, driving what the coverage is. So, yeah, I wouldn't necessarily agree with that. And then in terms of consensus, I'd love to say it's a lot more than just what people say about you. And in the report there are criteria that we set out as a little questionnaire to say, actually if you can answer these questions, you can broadly place yourself fairly as objectively as we would like. But fundamentally, I think the main thing we want people to think about is that if you're saying you're a niche lead, are you really a niche lead or are you a capacity leave? Both are valid. But if you're investing for niche lead and delivering capacity lead, you're putting your effort in the wrong place. It's quite hard to hide a full service lead because that is where you objectively provide a lot of services. It's the niche lead, one where you can persuade yourself you're doing it. So like, yes, I don't have a large lied size, but I do have leadership positions. Like, well, is that really true? And did you find that people would rather classify themselves as true leads or niche leads rather than capacity followers all the time? And it was a really big debate in the various conversations that we had, say at the LMA board or in conversations like one to one conversation with the market, it's like, great, wonderful, thank you for this. And it's really good and we buy into it and some people said it's not told us a huge amount. That's new. But it's really helped clarify what we were thinking. So what, I'm a capacity lead. I think I'm a niche lead. How big a problem is that? And I think in a hard market, not very relevant, necessarily. Yes, you're a bit overspending here, there and everywhere. But fundamentally, in a hard market, your expense ratio is much less important. And I shall come back to expense ratio in a minute because I'm conscious of laser focusing too much on that. In a soft market, it does become more important. And critically, if you are investing a lot of effort into a position on that spectrum and you're not delivering that result, you will just get selected out because what the brokers will be looking for would be looking for that leadership. And you will be pushing really hard in a direction and expecting a particular type of risk and particular type of conversation with the broker and you won't be getting them. Whereas if you accept that you're a capacity lead, then you know where your role is, you know what you need to deliver. As I said, on the expenses side, this isn't and shouldn't be the primary reason you're looking at this is because of expenses. Because in a market like the London market, volatility can just change the game overnight and underwriting can change the game overnight. So expenses are important, but it's not the primary or only reason for understanding where you sit. Yeah, and actually I agree with you and I think I'm much more interested about the implications on the operating model for each of those archetypes, which we'll touch on that in a second. I would love to hear your thoughts on how should markets think about the different operating models, depending on how they classify themselves. But this report is only a few months old. But like, has anything fundamentally changed? The market is changing quite fast. What has changed since the release of. Is there anything worthwhile noticing? I think since the Lead Follow report this year in February, I forget quite when at the start. I mean, the geopolitical environment has changed dramatically in that time. And so specifically in this period of time where people are prioritizing, their time has shifted around. We're certainly seeing, depending on where people's books of business are, they've got a lot of Middle east business that directs attention in one way or the other. Lloyds has released its new strategy in that time. We're a big fan of it because it's giving ground to kind of grassroots of what the market should be about. And finally the market has softened much more than people expected in that same period. I think I'm not entirely surprised by it. If you just look track back on cycles. I mean it's very easy for me to say, I'm not an underwriter but it feels like it's easy to underestimate how quickly things were software. But it's taken everyone by surprise. Most people are below where they were hoping to be in terms of budgets. I think other than the first one in terms of Middle east, most of it has just reinforced the needs to be really laser focused on your proposition. To me, the biggest shift that has happened since one of the reports is since we did the original one in 2024. And in that time we've gone from the closing stages of a hard market at the back end of 24 to headlong into a softening market into 25 and then obviously into 26. And it has really pivoted people to focus on this type of thing a lot more whilst balancing it with other strategic topics. I mean AI is kind of embedded in it, but also has grown rapidly. So I think those things have changed. Market softening has driven facilitization, that's no surprise. But it's really rapidly grown which is all connected to this overarching topic. But it's attacking it from different directions. I mean from our perspective it's just creating more interest in this. I think there are very few strategies that don't have this embedded in thinking. So it's probably gone from especially to your point of on the 24 report. It's gone from being something that everybody would agree on but there was less urgency to react to to probably now the market context is really screaming to take action on some of your recommendations, right? Yes. I mean it's entirely self serving for me to say so, but yes, I would agree with that if I think about the back of 24 when we were talking to people about it. So let's be clear, when the report came out the whole market wanted to talk about it either with us or the lma. It was absolutely hit the moment. But the market did segment much more into a couple of categories in terms of we really need to do something about it now we can see where the world is going to, we need to be aware of it, but it's less urgent for us. That has really shifted in the last 18 months. Doesn't necessarily mean everyone's doing everything about it. People are picking and choosing what they're focusing on but it has there's no one that isn't going. This needs to be embedded somewhere in what we're doing. So I would love to hear more about the. But just mentioned this segmentation. The point we made earlier about operating models. First of all can you share like what's your view on what the different operating models for these categories look like and then any examples of. You don't need to name the market but like examples of players that are actually significantly making progress in this direction. Yeah, I'll bring a few examples to life. So if you oversimplify it a little bit but it's a helpful simplification in terms of lead is about capability leadership being the first for brokers to think about when they come to the market. So that's about value add, service quality, underwriting expertise. I mentioned that we had a list of capabilities for leadership. We've got this little circle in the report that talks about everything from broker experience to pricing to underwriting to all the way around to digital claims, etc. Basically it's building an operating model that delivers those capabilities underpinned predominantly by people at the moment with tech enabling that. Whereas follow is much more about how do I efficiently and effectively follow. In fact in reverse order how do I effectively and then efficiently follow leaders in the market. And the reason for that split is obviously, I mean we talked about lead a lot in this call. I won't go into that. It's clear that there's a capability investment there with follow mostly historically those have been fairly intertwined. You certainly had some true follow plays in the past. But I mean the most obvious recent one is Key with their pure follow model as separate syndicate now separate business from Brit. But think about how you do that efficiently and effectively to get access to the risks that you are most interested in. So there's that simplification actually it becomes segmented because if you think about leadership it's like well am I doing a digital leadership where actually it's not so much about people at the underwriting point versus a people based one in follow. Am I doing on a portfolio basis, am I doing risk by risk like key or portfolio like Beasley smart tracker. So it sub segments and if you think about people that are doing this well there's a little bit of time will tell. So if you look at say the follow space, you've got Beasley Smart tracker that have really invested over the last few years growing that business separate syndicate, you've got the QBE QPS QBE portfolio solutions. We've got Canopus, similarly one of the fastest growing in the last three years. QBE has been in the game longer. They've created a segmented model all about writing portfolios, about cross class underwriting, about portfolio management. There are no single class narrowly focused underwriting in that business. They've grown very fast. They've obviously put a lot of rigor and a lot of effort around that and they've built the operating model around that. There's obviously there's a bit of time will tell over the cycle what happens to those businesses. There are a few that are being a bit more multi segment play and Beasley is a reasonably good example. I know the model is slightly shifting and obviously the acquisition, the future acquisition by Zurich will change things a bit, I'm sure But they've been had a very clear open market lead, kind of open market digital in their separate or was a separate digital unit in their smart follow syndicate. So they've taken a multi segment play and as I said like key, they've taken a one segment play very narrowly focused. There's lots of different and some do it a bit more hidden away. There is a few carriers and I won't mention their names but they're a little bit. They do the segmented model but it's not as obvious from the outside because it's within one legal entity. Yeah, but almost like regardless of the legal entity I imagine it's really difficult to be halfway there. So you either have that segmented model or you don't. Right. Because to your point the team, the capabilities are very different. Right. In the lead capacity you have to have the best underwriters analyzing individual risks, defining the terms, et cetera. Whereas in the follow capacity I assume you're much more looking at profitability of portfolios analysis. Right. So anywhere in between it feels like have you ever seen like anything that works or that is not either one or the other? I think there are subtleties. It is a bit more of a spectrum than you describe it as. I think what we have seen not work is kind of side of desk type initiatives to structure to, I don't know, try and run portfolios off the side of the desk. Unless it's class by class and it's a slightly different play. But genuinely building a portfolio solutions business with a few people doing it 20% who also do fully open market, that doesn't work as well in my view. In terms from an operating model perspective, does it need to be a fully separate legal entity? It's fully separate syndicate like a key or A. A smart tracker? I don't think so. I think there are some and some of the examples I meant where it's a bit more hidden internally. They've created a structure where they are distinctly separate operating models. There's some economies of scale from the managing agent over the top, if we're talking Lloyds, but fundamentally they're in the same business and I think that can work. But there is a real cultural aspect, which is fundamentally why Key was in a separate place with different people was because it's a different thing. And what you don't want is you don't want open market underwriters touching every risk if you're driving a portfolio business because the expense ratio will kill you. Yeah, my point was less. I don't think it requires a different legal entity, but it does require a decisive selection of who you are by line of business. You need to say, okay, this line of business, we are clearly, we want to be a leader or true leader or capacity leader or we want to be a follower. And then defining the operating model, at least for that line of business in that way. Right, Absolutely. Which is, I would say probably five, 10 years ago that was not the case. Right. In many syndicates with lines where they were doing a bit of. They would actually being more of a follower. But with a lead operating model, 100%. I mean, again, I know you didn't mean this, but again, it's not quite as black or white in terms of you either lead or you follow. You can do so if you look at a qps, there'll be lines that from a distance are exactly the same as what they're doing open market. But there's nuance to it. For others, it'd be very distinct. For others, they'll go, no, no, we only write portfolio business for business. We don't write open market. For some, they actually quite like the competition between the two because it hedges their bets. But you're right in terms of. I think the model previously of everything is just clumped together, doesn't stack up, in my view. That doesn't mean you don't find some portfolio elements within a class of business, but that just becomes an efficiency in terms of the operating model. It's actually more efficient to do it that way. So if you think about the almost the fundamentals of insurance, which is like you should shape your portfolio and the size of your book depending on the market cycle, you should be willing to shrink your book in a soft cycle because you might not find the right profitable risk and you might want to grow it aggressively on a. In a hard market. Would you agree that a follow operating model or approach actually is better suited for that approach of being able to grow and shrink as the market conditions change? I would assume in a lead capacity it's much more difficult and challenging to do. Yeah, I think theoretically and for the most part in practice you are absolutely right. And I think the fact that you're writing book of business cross class means that from an incentive perspective, the individuals in the team are not saying, well, like I've got to grow this class because that's the class I write and I can't be seen to shrink my book of business. Now I'm massively oversimplifying. There'll be a lot of underwriters in the market will go, hang on a minute. I'm delighted to shrink my book in a soft market because actually that over the long term is the best play. And I've done that for years. And that I agree with. But if you think about the fundamentals, there's a lot of emotion in this market and if you're writing things on a cross class basis, you're absolutely right. I mean, I've talked to some of the people that we've named and others where they say this is great, we don't like it, with all the usual caveats about broker relationships, etc. We just switch it off, that's fine. Or just reduce our line size, that's absolutely fine, we can do that. It is harder for most to do that when you have a team that you are consciously paying to write business in that class of business that is going south and then you've sized the team to the size of the book. So what was in the follow capacity? There's less of a correlation between the size of the book or the line and the team of people that you need to lead it. So that makes sense. It's great to hear kind of the progress the market is making on this, going towards a clearer segmented operating model. What would you say are still things that are still brewing, things that you perhaps thought would accelerate or have been accelerated by now, but they are not yet there. So I think pure digitally traded business is one. My expectation was that it would still be brewing. We've talked about this quite a lot in our reports generally and I'm particularly talking about corporate specialty here. Obviously if you look at UK personal lines, it's predominantly digital that has grown much slower than a lot of people thought it would do. I'm not entirely surprised Just, I mean, there's lots of reasons in terms of if it's a pure commodity digital product, there's a lot of time you go, well, why would this need to come to London? If I can commoditize it and it naturally works from a digital perspective, I could just keep it in country or fronting or however you want to organize it. There are definitely some good examples of where people have got that to work. Aegis, Opal Atrium, Gold, et cetera. Where there's a digital aspect, there are many others. I mean, key is digital. It's just digital follow rather than lead. I think there were a lot of people that worried about this kind of rising tide of digitization in terms of true underwriting digitization increasing and kind of taking everyone out of the Lloyds market. I never thought that would happen, but it has been very slow. So that's one another. I mean, you can't do a podcast nowadays without talking about AI and generative AI. I remember we did a lot of work with clients. When this all really kicked off in the market start of 2024, the usual kind of people started playing around with it. CROs got stressed and shot it down. Board said, what's your strategy? And all that type of stuff. So there's quite a lot of just helping people get their arms around it a bit. I'll be honest, I thought it would move more quickly in the first 18 months. And a reference that I give just to say that I'm not just a hype monger, is with Blockchain. I thought that was irrelevant for the market, for 99% of the market at the time, and we all said that. But it did move more slowly than I thought. Last year it moved about the speed level four. It's now taken a real uptick in the start of 26. Does that mean that everyone's delivering huge amounts of value from it? No, we're still in POC territory. But now is a time that if you're watching and waiting and hoping that you can just kind of ride it out for another year and a half without having done anything about it, we're seeing people genuinely shifting, taking a real big shift in their approach and level of investment, both of people and of money in that space, fundamentally because the models are at a point where they are no longer a novelty toy. Got it. And we've touched on the softening market. Are there any other context variables that are impacting? Well, both how the market is moving, but also the speed at which it's moving? Yeah. And when we talked about facilitization, that has grown very, very fast in the last 12 months. As I said at the start, it's a common feature of a softening market. You would expect to see it, I think people are seeing it grow faster than they have before. I think that's just partly because of the nature of the market and the digitization and the appetite for data. It's less purely just about an efficiency play, from kind of client to broker to underwriter. So that has grown incredibly fast. It's taken a few people off guard. Our belief is that facilities are now becoming structural. There's lots of caveats coming. So for those that are worried about me being a kind of facilities mega fan, I think now taking over the world, they are becoming structural. If you just look at the level of investment that brokers are putting into them, they're investing far above what we would do if it was just purely a let's get this in for a few years and see what happens. But I think the rate at which they've grown has been a cyclical, has been a feature of the cycle. Why would you say that they are. So what's different now for these to become structural? Is it technology again or is it something else? As a bit of technology from a broker perspective, they've started to crack the historical challenge of indexation. And what I mean by that is a placing broker doesn't need to use a facility and a client doesn't need to accept risks. They're part of their risk being placed through a facility. They can say, no, I don't want to do that. And that's correct and proper. But what they have worked out, the brokers, is they've worked out a way of embedding it in the workflow of the placing brokers and helping them engage their clients on it. So it's seen as valuable, it's seen as efficient, effective, allowing the brokers to spend time on where the clients value it more in terms of understanding the risk, spending time finding true leads that genuinely drive value. And if you start to crack that, the indexation bit, which is making sure that you provide enough of a spread of risk across the market so it's representative of the market as a whole, rather than just being the stuff you can't place anywhere else, which has been been alleged of some previous endeavors of some of the brokers, then actually people know what they're getting into. The underwriters know what they're getting into, the clients and the brokers. Placing brokers see it as valuable and therefore it's then embedded in the system and people are just used to using this. And from everyone's perspective, if data starts to flow to your point about tech, whereas a tech enablement, suddenly everyone's going, actually, you know what? Within reason, this is beneficial to the market. If well managed and good oversight from Lloyds and syndicates, et cetera, then I can see it remaining. The reason it's accelerated so much and arguably why it's such a big chunk of the market. I mean people are talking about 30, 40%. If you add up all of the different types of facilities is a cyclical thing. Do I think it will massively drop off? Yes. No. Do I think it will grow at this rate continued? No, absolutely not. And do I think yeah, in a hard market that change bit? Yes, but I think it's fairly well embedded. There's one caveat to that, is that in this market very people driven. If there's a kind of perceived catastrophe, and I don't mean like just a hurricane, I mean like a facility doesn't perform well, is perceived to perform really badly, that could change everything. So you worked with a significant portion of the market and you obviously advise, I guess specifically at the back of this report, but more generally they come to you and say, hey, well, are we doing enough? Are we working on the right things? I guess it's quite difficult to provide like a themes across the whole market. But if you had to say like what are your main recommendations of where markets should be focusing on right now and getting it right in the next six to 12 months. So I think fundamentally everyone needs to be managing the cycle very, very carefully, both in terms of not kind of dragging it down obviously, but also just being very thoughtful about where you write business. And a lot of people we're talking to are talking about thinking about it carefully. And it's just a case of putting that really concerted effort in. We help a number of clients think that through, think a bit more on a portfolio kind of allocation basis, thinking about their strategy in terms of where do you place your bets, Thinking about more about capital rather than necessarily just focused on kind of underwriting performance. Per Cobb, looking at broader market trends, not everyone has done that. Some businesses are much more structured around the lead underwriters are in charge and then you add everything up. So we're helping people think a bit more top down, think about it and thinking about things as a segmented model. We talked about that before, being really laser focused, where you're going to play and where you're not digital lead, for example, it's absolutely acceptable for some people to say, this is not for us, we are a true lead, open market lead. That's what we do. We're not going to play in that space, we're not going to distract ourselves being really clear about that. And within that, therefore, what is your proposition? Lead, proposition, follow proposition. And what is your operating model? How do you structure yourselves to deliver on that strategy? Fundamentally, in a softening market, competition is much greater. You need to have an edge over your competitors. What is your edge? How do you deliver your edge effectively? And then there are just a few other bits that hang off that in terms of firstly AI, you need to think carefully about that. In our view, it's not a standalone thing, it's a part of your business. And therefore you think about how you embed it in your business today and over time, whether you want to be a leader in that space, whether you want to be a fast follower. There's a bit around processes. This is not just shifting from being a true lead to being a capacity leader, isn't just tweaking some processes, it's fundamentally. You mentioned this a few times, thinking about your operating model and then in terms of the technology becoming much more open to being interconnected. I've been saying this to people for a number of years. The London market tech stack was originally designed as a record keeper. Can I log a policy? So I know what I'm underwriting, I me know what I'm underwriting. Therefore people type this stuff in, it's saved somewhere. It wasn't designed for the modern age of interconnectivity. There's a bit around like reach out to different data systems, gathering kind of cat data, whatever it might be, weather data, marine data, but over time it is going to be a much more integrated system. Brokers connected to carriers and the CIOs and CTOs need to think about that really carefully because they are predominantly sitting on tech, not designed to do that. I mean those are broadly the things. And actually one last point, be really clear, it's not just about expenses. It's not about. Sorry, it's not just about expenses. This is not a pure expense play. This is a business strategy, a proposition, a market positioning, a competitive edge play of which expenses disable. One of the things that I see some people defaulting into is when they think about this lead follow model, they think, well, lead is about fully human underwriting. Follow should be much more of like an automated AI driven model. And I Would love to get your thoughts, because obviously I think your answer is going to be, it's not that black and white, which I fully agree. Right. And perhaps two reflections. I mean, would love to hear your thoughts. One is on the lead side of things. Even when you lead, if you look at the size of the risk in the London market, there's always the 80, 20. Right. So the 80% of them will be reasonably more homogeneous, smaller risk, and 20 very real, complex ones. So even if you're a leader in that line of business, how do you adapt to those two types of different risks? So challenging. It needs to be human underwriting. But I'm also challenging the opposite. Right. It's like, if you're a follower, if you follow it, should it be fully automated or not? So what are your thoughts on that? A few observations. We've done a lot of work with clients on codifying underwriting rules, and it's much more than you would expect. The number of times you sit in a room, an underwriter says, well, no, no, no, you can't codify my experience. Two hours later, you have a very simple spreadsheet doing a 90, 10 on the risks that come in. Now, there's lots of other reasons why that becomes hard data flow, timing of data, all that type of stuff. But fundamentally, there is a lot out there where this myth of expertise is a myth. Now, am I saying that the London market is living on a myth? Absolutely not. There is genuine expertise. And actually, one of the things we find particularly interesting is that what people think they do when they underwrite and what you codify doesn't always end up being what they actually do. And actually what they actually do is better. So there's obviously a learning cycle in that. So in terms of digitization, I think there's certainly much more that can be digitized than people are willing to accept. There's a cultural aspect. You've been trained to scrutinise things. You've been trained. Anything crosses your desk, you look at it and you understand. You put your expertise in. Again, do I think structurally, the Lloyds market, London market, has an issue? Nope. But I do think the tide can be higher than people think it is. So that's in terms of the digitization piece. In terms of the AI aspect, I think there's a real exciting opportunity here, which might sound scary to some, but I think it's just thinking about how the world is evolving. What underwriters really add value in is, particularly in the London market, they're known for bringing a Risk. I mean, historically, bringing a little scrap of paper with a few words on it, someone look at it, sniff it and say, yeah, I'll underwrite that. And the speed at which you could pick something up that other people wouldn't touch because they're like, I don't really understand that at all, was hugely valuable. And I think what I'm excited about, and I'm going off track a bit, but what I'm excited about in the Lloyd strategy is that they are getting back to the grassroots. Like, why do we add value? Rather than a kind of like, everything should be straight through and with a slight vibe from previous incarnations. And I think what Genai has the capacity to do is to support the underwriter in being able to absorb huge amounts of information. So when that scrap of paper comes across their desk, they can sniff, test it, they can use their experience and then augment that with a huge range, a huge variety of data from other places to make better decisions to your point, to triage out the ones that either they don't need to look at, or the ones where actually, you know what, you never underwrite this type of thing. It's got this particular bit in it, you just don't touch it. Or by the way, looking at the claims performance, you should never underwrite this type of thing because it's not great. And allow them to spend the time where there is real value. And Genai can do that. Is it quite there yet? It's very close. The hallucinations are much less bad than they were. This worry that everything that is produced is just all made up is being dealt with. It's not perfect, but it's being dealt with. And I see that as a really exciting opportunity because you can do all sorts of things. You can reduce your minimum premiums because actually you can get through things much more quickly and focus on where the value is. You can potentially expand your appetite a bit. You can improve the relationship with the broker because the broker knows 90% of things. Within 10 seconds they're going to get a notional broadly yes or broadly no. So I think that is a real opportunity and it's not here yet. So it's about the pace of AI. And I wouldn't want to be the kind of person that's scaremongering to say, like, everyone else has absolutely smashed it. But if you are assuming it's a way out, just need to think about that a little bit carefully. One last question, just building on that, because most players today are thinking about, like, okay, how do they prepare their workflows, technical architecture for that future you are describing? Right. And I think one thing I see is, I think that there's a risk that in this world of AI we are still building workflows that are human first. So how do you advise your clients in thinking? Okay, well, most likely for the next months or whatever period of time, whereas you get more comfortable, you still want an underwriter to sniff, test or to look at every risk. But over time the trend you cannot negate, it's going to increase the automation. So how do you think about how they should be thinking about? I'm at a very high level, that's their thinking in the architecture. So I mean there's the business architecture and then there's the technology architecture. So fundamentally AI will over time shift the way that people think about technology architecture. At the moment, technology architecture is predominantly structured around processes and around human LED processes fundamentally. Actually, if you look at genuine kind of pure end to end automation within kind of services based businesses rather than product based businesses, there is a huge amount of, actually a lot of it is about decision making. And what generative AI can do is help make decisions. It's not just about automation, it's not just about taking a boring process and doing it quickly with a computer and ideally more accurately, it can make decisions, it can make choices. Again, are we there today in a way that you would just let go without thinking about it? No. Is that of are we getting there rapidly? Yes. So one thing is around the technology architecture is actually the technology architectures will shift to being process aligned, to being decision and capability aligned, much more so. And that is a very different architecture from today. And I'm very conscious that people are starting, they're not even starting in today's world, they're starting two generations back mostly. So that's not only do we help people look at where the future is, but go, okay, but where are you today and how do you get there? Because it's all good and well going. The vision is the future is bright and exciting. Fundamentally, you've got a journey to go on. And then I think in terms of the business context, it's that real balance again of where do you believe it will get to and how do you get there. And in the short term it is fundamentally give people safe confidence that actually this is positive. It's making good decisions when you give it the right inputs and allowing people to progress as a business so that they trust and value rather than fear, which is a lot of where certain parts of the market have started on. It's like this is hallucinating and taking my job. Greg, this has been a fascinating conversation. I leave this discussion thinking one is very clear message of every player should think about what type of lead and follow they are and then think how that cascades down to the business architecture and operating model and then to the technical architecture. Thinking about how do you align your technology to those capabilities rather than just trying to do a better version of the human processes today. Which I think it's a great forethought and I'm sure many CIOs, CTOs are thinking about this at the moment. Yeah. And you'll see that, I'm sure, in your conversations with your clients. It's kind of like, can I take this human thing and just slot it into what we do? It's like, well actually if we just pause for a moment, we can make this better for everyone. Exactly. But you're right, it's like they are still dealing with architecture that are two generations ago and they are thinking about how do you leapfrog these generations to build something that is fit for purpose for the next five, 10 years? And I think obviously that is something that requires a lot of discussions within the industry. But with that all I can say is thank you so much, Greg for joining me today. I thoroughly enjoyed the conversation. Thank you very much for the invite. Appreciate it. Making Risk Flow is brought to you by Zytora. If you enjoy this podcast, consider subscribing to Making Risk Flow in Apple Podcasts, Spotify, or wherever you get your podcast. So you never miss an episode. To find out more about Cytora, visit siteora.com thanks for joining me. See you next time. It.