AJG’s Simon Matson: We’ll go where clients want to speak with us
In a year of unprecedented events, Arthur J. Gallagher’s CEO, UK Broking & Underwriting looks ahead to 2021.
By Marc Jones, Associate Editor
After meetings set to take place at the 2020 Monte Carlo RVS transitioned online, going forward client interactions will depend on what those customers want from the industry after an unprecedented year, according to Simon Matson, CEO, UK Broking & Underwriting at Arthur J Gallagher.
“The cat season is well underway and that's playing itself out, but there are lots of spinning plates at the moment,” Matson explains. “'Unprecedented' is the word of the year – every communication I've seen or we've sent out uses the word 'unprecedented.' This is the year of unprecedented events.
“That said, this is an incredibly dynamic and incredibly robust industry," he continues."For us to be able to survive this and serve our customers and look after our team is a hell of an achievement not just for Gallagher but the entire industry. To be where we are now compared to when we were staring down the barrel of the lockdown in the UK back in March is an accomplishment.”
The move to electronic meetings instead of face-to-face contact, which was driven by the COVID-19 Coronavirus pandemic and the national lockdowns that started in March, has allowed re/insurers to continue to do business in 2020.
“Remote conversations have been picking up due to COVID-19 and communication across our industries has increased exponentially and we’re now much, much better at it,” Matson explains. “So, you're still going to get the kind of data that you need, giving an understanding of market trends and ratings and people's concerns, albeit coming through a different medium.
“However, there is definitely something lost in not having that face-to-face contact that aids relationships, in my opinion,” he adds.
Ironically this years event would have been Matson’s first time at Monte Carlo, as his background in the re/insurance industry was on the specialty side.
“Reinsurance is near the source of capital for our industry, as it influences where the market's going. That kind of flow of information from you meeting people face to face and then networking – those were the kinds of things that I was looking forward to this year,” he says.
Asked if he thinks that there will be a Monte Carlo RVS in 2021, Matson says that it's kind of a chicken-and-egg situation; there's an amount of fear of missing out, or a fear that not being present at an event leads to a weakness in terms of revenue sources.
“I think if your competitors flood back, you’ve got to have a seat at the table,” he points out. “Practicality speaking, you can see the content from the event without being there in person but there is the perceived danger of missing something.”
That said, Matson adds that if the event is looked at purely from a cost perspective the one thing that the industry now knows from the COVID-19 pandemic is that the re/insurance industry has the ability to trade remotely -- and an electronic version of the RVS means that companies can eliminate the costs associated with having to travel.
“Brokers are led by customers, so what do our customers expect and want from us? If the customer wants to see us, we are going to see them. And the opposite is true – if they are cautious and don’t want to travel, then we’ll follow suit.”
Looking at rates Matson adds that 2020 has been an unusual year and that pricing has been moving, generally speaking, in a more positive direction across the entire market. In his view the market is fluid, as can be seen by the capital coming into the market. He adds the caveat that it’s the market that sets rates according to a supply-and-demand curve, so nothing ever stays still -- but at present, he thinks that it's moving in the right direction.
“Casualty is probably the most difficult area because they’ve got the furthest to go because of loss deterioration and some reserving issues,” Matson says. “In terms of being able to make recoveries, we’re seeing that terms and conditions are tightening not only on the primary insurance market but with the reinsurance market as well.”
