The art of the story: How to win in the Lloyd’s market

[MUSIC] Welcome to IB Talk, the leading podcast for the insurance industry across the United States. Brought to you by Insurance Business. [MUSIC] Welcome to IB Talk, where we dive into the biggest topics shaping the insurance industry. I'm Gia Snape, Editor for North American Insurance at Insurance Business. Today's episode is all about the art of the story, and why telling that story well can be the difference between getting your risk placed at Lloyd's or walking away empty-handed. If you've ever worked with the London market, you know it's a world built on relationships, reputation, and perhaps most importantly, a compelling narrative. In an insurance marketplace that sees hundreds of submissions a week, how you frame the details, highlight the nuances, and anticipate the underwriter's concerns can make all the difference. Our guest today knows this better than most. King Flynn is the chairman and non-executive director at Fennchurch Broking, the independent London-based property insurance broker. He has decades of experience spanning carriers, brokers, wholesalers, and the Lloyd's market. King, welcome to IB Talk. Gia, thank you for hosting me today, and greetings from Viva Las Vegas in Nevada. Fantastic. You've worked across nearly every corner of the insurance ecosystem, and now you're leading Fennchurch's North American expansion. What's one thing you've learned about how a risk needs to be told in the Lloyd's market? Great question. So think of Lloyd's a bit like the TV program, the Shark Tank. It's all about telling a convincing story that makes sense, which then earns a buy-in from the capacity providers, in this case, Lloyd's, and the UK company market. The US retail or wholesale broker needs to agree on a strategy well in advance of any underwriter discussions. And going back to my first comment about, you know, Shark Tank, underwriters look at these risks, many risks every day, and so the best job we can do in terms of condensing that into a hard-hitting message will ensure better success. We hear the phrase "packaging a risk a lot," but what does it actually mean in the Lloyd's context? You know, what separates a submission that gets traction from one that gets passed over? Simply defined, I would say, a well-thought-out proposition which really delivers a win-win solution for both the buyer and the seller. Secondly, it demonstrates to the underwriter the client has been qualified and the terms and conditions are within the current market appetite. Right. With all your cross-market experience, you must have had, you know, a lot of, you know, seen a lot of risks that weren't, you know, packaged as well. What do you see as the biggest misconceptions that US retailers or wholesalers have when they're engaging the London market for the first time? Let's start with the fact that London is a totally different trading environment from the US market. Grinchively, because it's a syndication market, it's several, and oftentimes many syndicates supporting a single risk. There's one overlook fact sometimes, and that is London underwriters carry strong credentials in understanding the moving parts of the target industry classes that they underwrite. So let's put insurance aside for the moment. The more informed US broker is about the technical pieces of the industry, the better the outcome, and I'll comment more on this later, too. It actually has its own clearing system, exchanging, which collects and pays for across all the different syndicates. Understanding the principle of what we call utmost good faith, a principle that has stood the test of time really over centuries, yes, centuries. And let me expand on that comment just a minute. The brokers in London are entrusted with, they are entrusted with the idea of presenting to the underwriters the facts around a submission. They sort of carve out all the, if you will, fluff and present just the facts in a very condensed form. And this allows the underwriters to make decisions without too much retakes compared to perhaps their US counterparts, which may have to undergo several peer reviews or management sign-up. And finally, underwriters, US brokers may at times consider Lloyd's the market of last resort. But really, when you look at it, it can provide continuity over the long term. It's been a business now 350 plus years. So think of Lloyd as a market that can partner with you, the US broker, and you're valued and client. So what are your top tips for navigating tough conversations with clients and underwriters? As we know, many people have gone through all kinds of training on conflict resolution, claims, management, how to resolve a trading grid issue. These are things that many people have experienced. So I would start with know your audience. If we're pitching a submission to an underwriter that we know will ask, we'll ask difficult questions. Let's anticipate those in advance. Equally important, let's go back to the client. Let's have a conversation with the end client about what they're trying to achieve with this property placement. Then we can anticipate questions underwriters will most likely raise and how we work around it. I've always felt that if we have sort of that open conversation about anticipating the questions the underwriters are going to ask, we can prepare ourselves and how to address those. But going back to my earlier comment, I would say many of us in the industry have gone through exhaustive training, learning opportunities, spanning, many of the things we may run into. Although the technical subject might be different, we still have those embedded skills. Let's take advantage of those. Okay, so when you're preparing a client or broker to approach a lawyer's underwriter, what story elements do you think are absolutely essential to get right? I would start with getting the facts right, keep them crisp, avoid all the fluff, if you will. So getting that condensed narrative. And then addressing the questions we anticipate, the underwriters are going to ask, are the values up to date, in terms of their schedule, is a lost record up to date. So we want to anticipate any questions that will come back to us. And that when I say us, I'm talking about venture, working in partnership with a US broker. Pricing qualification is another crucial part we do before going to the market on any risk. Better to get the pricing out of the way sooner than later to make sure we're on the same page. And in that regard, we endeavor to develop realistic target pricing versus blue sky. We want to be very transparent with both the retail broker or wholesale broker in the US and the client. Looking ahead, as Fentridge expands, it's North American footprint. How are you bringing that philosophy of storytelling and market alignment into your growth strategy? That's a great question. And one that boy, looking back on my own experience, I think we can really work hard to promote. And that is bringing old-fashioned practices back. I might go so far as to brand it as old school is the new new school. We want to provide that bespoke service to the broker in the US and their client. I think we've become far too reliant on devices and electronics and there are all kinds of applications that help us, but they're not. At the end of the day, we have to be able to work with the client to deliver a result. So, on every account that Fentridge works on, we present a summary deck. It's really a perspective, if you will, for the underwriter to read through and get up to speak quickly on the account. We also try to take the murder mystery out of this submission and provide a factual document. The other guys can read, bringing our submissions to the top of their pile. And then finally, coupled with the storytelling, we're able to run some analytics on the natural catastrophe data that we've developed on the back of FEMA data and our own proprietary submission tool. And this gives us a great idea of, for example, the catastrophe risk load on any given account and what the key drivers of the account are. So, ultimately, we deliver a perspective to the client and the underwriters that shows the profile of the risk and what we're endeavoring to achieve on placing that property risk. In closing, here are a few ideas that apply to the super-dumaries in our business as well as folks at my own tender age. One, get educated on the industry you're focused on. I can use my own experiences as an example. So for a period of time, I focused on the offshore oil and gas industry. And during that time, I took advantage of learning opportunities and technical training that were offered by the industry, not insurance industry, but the oil and gas industry. So I got to learn the ins and outs of that business and what some of the emerging risk for were for the oil and gas industry. Secondly, take advantage of opportunities to improve your exposition skills, secondly, your presentation skills, and again, technical learning about an industry. This is not only helpful, but great fun as well as I've experienced. As I've shared with many colleagues and clients over the years, I say I learn something new every day. So adopt that and you'll find a new way to deepen your experience. Yeah, I appreciate you having me on your podcast today. Those are some great insights. King, it's been a pleasure to have you on IB Talk. Thank you for sharing your perspective on the art of the story. Thank you again. And thanks to our listeners for tuning in. Don't forget to subscribe to IB Talk for more conversations with industry leaders shaping the future of insurance. Thank you for tuning into IB Talk. You can listen to the latest episodes on Apple, Spotify, Amazon, and all major listening channels. Just search for IB Talk.