Arch Insurance International Pursuing Better Together Podcast: Caroline Wagstaff
Arch Insurance International
Hello and welcome to another in our series of Pursuing Better Together podcasts produced by Arch Insurance International. Today it is my great pleasure to be talking to Caroline Wagstaff. Caroline, as many of our listeners will know, is CEO at the London Market Group, which represents the diverse interests of the city’s insurance and reinsurance markets. She took up the role in April 2021 and since then, has helped spearhead numerous marketing initiatives and been at the centre of many of the critical developments shaping today’s marketplace for a better future. Caroline has worked in the London Market for over 25 years, period which has seen it change considerably in virtually every front. A large part of that time has been spent on the marketing communications frontline. She is the founder of Lucid Communications, which he set up in 2005 and which later became part of Luther Pendragon and has worked for a broad spectrum of companies across the financial sector during this time. Her career also includes a five-year period as Head of Marketing Communications for Lloyd’s. Caroline, thank you so much for finding a gap in your very busy schedule to speak to us today.
Caroline Wagstaff
My pleasure, very nice to talk to you.
Arch Insurance International
Caroline, I wanted to start our conversation by looking at your career in the insurance industry to date. I wanted to ask, firstly, what was it that drew you into this insurance world? And I suppose in addition to that, what would you say is held your interest in the market since?
Caroline Wagstaff
I think like lots of people, and we’ll come on to this, I’m sure when we talk a bit about talent and the insurance market, is I did fall into insurance. A friend of mine who’s now a senior CEO in the market, rang me up, he was at Lloyd’s and said, ‘I don’t know what you do, but it always sounds more interesting than what we do. Can you come and talk to my boss about being a marketing director?’. And that was the first step in my insurance journey. So, the result of that was I was appointed Head of Marketing and Communications at Lloyd’s, a job I did for five years. But like a lot of people in other bits of the city, I never really come across insurance, I’d been a commodity trader, I’d worked in spread betting, I’d been in derivatives, accountancy and yet the village that is EC3 had pretty much remained a mystery to me. And the reason I stayed in it, is because I love the community, and I love the market. And I love the fact that you get to know people and your paths, come together, then go part and come together. And I think it is unique. And it is the only bit of financial services, which is still co-located. There are 350 businesses all within half a mile of the Lloyd’s building, all in the same sector, many of whom are supporting each other. And they do this unique thing, which is that they compete and cooperate at the same time. The thing about insurance is, it touches so many bits of the economy, so many bits of people’s life. There’s always something that’s new and interesting and new types of products. And so, I found it endlessly intriguing and interesting. I’ve been really grateful, working with some great people and some great firms. And surprised but delighted to find myself, leading the London Market Group.
Arch Insurance International
You mentioned yourself that you worked in a number of different sectors prior to finding the insurance sector? How would you say the communication challenges that you face in the insurance sector compared to those that you faced in other sectors?
Caroline Wagstaff
I think the issues are all quite similar. I think when you’re operating in a business-to-business environment, rather than a retail environment, many of the communication issues are really the same. The thing that always strikes me when I look back is to how the communications industry has changed. So, when I first started, I’ll say these words and young people look at me and say, ‘What is a fax?’. We used to courier press releases to the newspapers, and life was in a way simpler and it was literally fish paper tomorrow. And now of course, we’ve got this incredible range, we can do podcasts. I mean, in those days, there was radio interviews, and that was it. The big difference is that we have control over channels that we never had control over before. So, you have choices, the channels, you can’t control, still traditional media and things, of course, living on the internet. But then there are so many more things that you can deploy to tell your story. And I think that’s why communications has become both more challenging, and more interesting.
Arch Insurance International
I suppose, as well, it’s that speed of communication and that ability to reach so many thousands of industry practitioners, with the click of a button.
Caroline Wagstaff
Yes, and you can tell your story. As the LMG, we’ve reached out to people in the last few weeks actually just talking about, the work we’ve been doing with Sixth Form students in our Futures Academy. So much of that engagement has been done through social media, through LinkedIn, and our channel to tell our story and help people be part of something.
Arch Insurance International
In 2021, you were appointed CEO at the LMG, following a six-month interim period in the role itself. I just wanted to get a sense of how it was for you stepping into that position, and also going about taking on the myriad responsibilities that that role entails?
Caroline Wagstaff
Well, it was an incredible privilege to be asked, and I worked in the market for a long time. And in my agency life, the LMG had been a client. So, I felt I had an understanding and a real belief in what it was there to do. You know, there is a role for the market to come together and speak with one voice, not on a huge number of topics, but on a certain number of topics. And I was a real believer in that. It also felt very challenging. I took on the job in COVID. So, we were all working remotely. It was that period where we were all very nervous about what did the world look like when we were coming back? And so I think there was a there’s a real sense of we knew what some of the funding fundamentals were, I was incredibly lucky, I was building on really strong foundations laid by my predecessors. Work that had been done with government and so forth that gave me a really good basis to kind of go from, but clearly the world has changed, and things change and some challenges still remained. And so, it’s a question of sitting down and deciding how we wanted to take those forward. On the government work, it was relatively simple. We were in the throes of the financial services and markets bill coming into parliament. So that was in a sense, a train I just had to get on and make the best of it from our perspective and figure out what we needed as London Market. I think with the talent work, that’s been a debate that has dogged the market for a while. As a friend of mine said, it was raised as an issue when he joined as a graduate 30 years ago. So it struck me as being a really important one to try and figure out what our role is the LMG was in that?
Arch Insurance International
Yes. Do you think that the experience and the various communications roles that you’ve held gave you a slightly different perspective, and perhaps a slightly different way of approaching some of the long running challenges that the market has faced?
Caroline Wagstaff
I think it definitely gives me a mindset where I view things as campaigns. So, the LMG is a campaign, I don’t want to call us a lobbying organisation, because I don’t think we’re lobbying in the pure sense, but we’re definitely a campaigning organisation. And I think my marketing and comms background helps when you’re trying to think about what that looks like and what the trajectory should be. Definitely knowing a lot of people in market, having worked for them, having built up kind of mutual respect and a knowledge of each other and how we work has also been really helpful. So, it’s allowed me to go and have conversations where if you were coming into this completely new that would have been, that would have been more challenging.
Arch Insurance International
I wanted to do to focus, I suppose one of the primary functions of the LMG and that’s this idea of helping to maintain the uniqueness of the London Market insurance ecosystem that exists. Does that uniqueness still carry as much value today as it used to? Is the London market still as unique as it ever was, do you think?
Caroline Wagstaff
There in fact is no other insurance market in the same way that London is a market. So I think the fact that you have A) an ecosystem of brokers, underwriters loss adjusters accountants, lawyers, you know, other support services absolutely sets it apart and helps us to come up with better solutions be more creative? The fact that London, in 2020, which is our last set of combined data, underwrote $120 billion worth of premium, that’s bigger than Bermuda and the US excess and surplus lines market combined. Just the sheer size in terms of capital and expertise that London presents means that it is genuinely unique. What I think you’ll see happening is stuff starts in London, and then it will go back into domestic markets as they mature, and their risk appetite for those types of risks grows, and London will focus on something new. It’s an evolving market. And of course, I’m not saying that we’re without competitors, our market share has been pretty stagnant for a decade. So, although that premium number is very big, everyone else is growing, too. So, we don’t want to be complacent. But do I think we have something that is a genuine proposition to put to customers and business producers? The answer is yes.
Arch Insurance International
Another point I wanted to raise and linking into our theme today of Pursuing Better Together, the role of the LMG plays as a forum for London Market organisations, that very much aligns with Arch’s guiding principle here of Pursuing Better Together. How do you think the LMG demonstrates that concept of Pursuing Better Together?
Caroline Wagstaff
The honest answer is I think we live and breathe it every day, because we are nothing without our stakeholders, and the member companies within each of those. So, we are a living embodiment of Better Together, we represent brokers, we represent the company market, and we represent syndicates at Lloyd’s. So we are literally together, and what are my litmus tests for when I’m thinking about what we’re doing is, is there value to every bit of the community in what we’re doing? And if there isn’t, then we shouldn’t be doing it? It’s why we have a very clear focus on doing a relatively small number of things really well, because there’s a whole load of stuff we could be doing, but it has to work for all the constituents. And that’s not just by type of organisation, it’s by size of organisation. The London Market has this extraordinary shape where there is a number of large businesses both on the underwriting side and on the broking side, then there were some medium sized businesses and there’s quite a long tail of small experts, specialist organisations. It might be a syndicate or it might be a broker who’s doing something very niche, but might be employing under 20 people. So when we look at what we’re doing, it has to work for all of those people. If we were in the market for a strapline, you know, we couldn’t do much better.
Arch Insurance International
Of course, one of the key functions of the LMG is that of engaging with government and regulators that you touched upon earlier and this idea of focusing on proportionate regulation for the insurance sector. And of course, in this context, the LMG supports the work of the Parliamentary Regulatory Reform Group. Just in that context, I wanted to ask, first of all, what prompted the LMG to support the Regulatory Reform Group’s work and then what changes would you like to see in the existing regulatory framework for insurance?
Caroline Wagstaff
So, we’ve been on a journey with the Financial Services and Markets Bill, now Act where a huge amount of power has been devolved back to the regulators through Brexit. And this piece of legislation is the kind of onshoring of a lot of that. And the point we have been raising, boringly, but consistently through this process is that you shouldn’t be giving regulators vast amounts of new powers or extended powers without some form of accountability. And we felt quite strongly that when the Bill was first put before Parliament, it sort of left the regulators not only to mark their own homework, but to set their own homework, you know. So, a lot of our activity, both with the regulators, with the RRG, with government, and the Treasury has been to say, we just think there needs to be greater accountability. And the Bill could do better at that. And our campaign has been very successful. The Bill has changed, I think, a lot further than the Treasury officials ever thought it, would. There is a lot, there’s more metrics, there’s a consultation going on around how the regulators will be held accountable. And the work of the RRG is just part of that. And what was interesting, from my perspective, when we first met as a group, with the parliamentarians, is it’s not just financial services, there’s telecoms, there’s utilities, there’s pharma. There’s a lot of other industries in the group. And many of the issues around regulation are the same. You know, how does it dovetail into policy? How much independence do the regulators have? What does quasi-regulation look like? So that’s really the guiding principle behind everything we’ve done. People come to the UK to do business, because it has a robust regulatory framework. It is definitely a plus. What people like is consistency and they also just want the regulation to be delivered in a timely fashion.
Arch Insurance International
Of course, the LMG, has been advocating for a much more proactive approach to, I suppose creating a much more competitive insurance industry within London. And of course, you’ve touched upon there a few of the stumbling blocks to that competitiveness. And just on that subject, what else would you say the government needs to do?
Caroline Wagstaff
It’s giving useful tools in the financial services markets Bill. There is a clause which allows it to ask the regulators to report on almost anything it wants. We have certainly said to them, we think you should use that tool sooner rather than later to ask them about what they’re doing around competitiveness and growth. They’re doing a consultation on metrics. And so hopefully, they will be asking them to report on some of those metrics quite quickly. So, I think giving themselves the tools to hold the regulators to account and to really ask some tough questions. As well as also looking at where are the growth areas? So, we’ve been talking a lot about whether we could introduce a captives regime here into the UK. It’s a centre of expertise for captive insurance but there are no UK-based captives. They’re all offshore, even for government owned entities ironically. And it’s back to the word you mentioned earlier, which is proportionality. And why this is a kind of a core theme of what we’re asking for, which is currently captive insurers are regulated as if they were a normal insurance company, even though the risk they pose to the system is incredibly low, because they’re simple much self-insuring, and so we’ve been sort of talking to the regulator, talking to the Treasurer about, well, if you could just change that and a few other things, we think that could be quite a compelling proposition.
Arch Insurance International
It comes back to this competitiveness of the marketplace. And that is this need to essentially reskill its workforce and attract that a stronger pipeline of new talent into the marketplace, but promote the sector more widely as a as a clearly defined career option for school and college leavers. What are the key sort of recruitment challenges that the London market is currently facing? And what can it be doing better to bring new people to bring younger people into the marketplace?
Caroline Wagstaff
So the good news, I say, good news in highly inverted commas is that this isn’t a problem that is unique to the London Market. I’ve actually now had this conversation with extraordinarily the Central Bank of Saudi Arabia most recently, with people in Australia, people in the US and the answer is, insurance is not seen as a sexy go-to career in almost any country, possibly Bermuda might be the exception because of its geography. But every country I’ve spoken to, industry professionals have all said the same thing. They have a recruitment challenge, because nobody wakes up saying, what I want to do when I grow up is be a Property Casualty Underwriter. And the reason for that, I think is that we’ve actually been rather insular, we’ve sat in our village and EC3, and we haven’t really got out there and talk to people. So, I’ve broken down the challenge into three problem statements that we can solve for. The first is exactly that. We don’t just need to tell a better story, just telling a story would be a good start. We need to tell people what it is specialty insurance does, and what it can offer as a career. So that’s step one. The second is, we have to hang out and get that story out in channels that young people hang out in. We need to use their channels, not expect them to come into ours. And the third thing is, we do actually have to do this as a unit. This is one of those areas where I say, what do we do every day, we pool capital to take better risks, bigger risks. Why don’t we do that with talent? Why don’t we pool our resources to move the needle rather than everybody doing one school, three students, you know, and it’s a bit of a patchwork quilt of initiatives. So those were our three problem statements. And we have made huge progress against all of them. So, we’ve built a website called London Insurance Life, which is a single source of information for young people on specialty insurance. It’s got podcasts, it’s got videos, it’s got profiles, it’s got everything you want to know all written in plain English. It’s got what I call the passions page. So, we haven’t had to tell people what terrorism insurance is, we’ve said what are you interested in? You click on jewelry or fast cars or horses or whatever it is, and then it shows you how insurance interacts with those topics.
Arch Insurance International
What kind of traction Are you getting on the London insurance live channel because that sounds like a great way to connect with people.
Caroline Wagstaff
So what we have to do is we have to drive traffic to it. Just building it is step one, but we’re not Kevin Costner, you know, if you build it, they will come. So, what we’ve now done is we’re saying, well, we’ve got that and we’re continually adding new content to it. But we’re driving traffic to it through TikTok through Instagram, through LinkedIn, through Twitter, through Facebook. And what we see is when you have some content that really engages young people, you get really good traffic and the traffic is sticky and it goes to the jobs board. What we’re learning is what you really need in this is influencers. Just before anyone is really worried, I’m not going on TikTok. And even if I did, I’m not sure it would move the needle. But if you can find the right influencers, and third parties who are getting the followers, and you can get them to engage with us, Bob’s your uncle. So we did some content with an influencer called Phil, he’s done some films around Lloyd’s and fine art, and we’re picking unashamedly sparkly stuff. Oh, yes. And guess what, he had a million views of one of his videos, now. But what we really need to do that my big ask to the market is, if everybody has said to me which there are a number, oh, you know, we need to be doing more about this. If they will go out and share this content and did some stuff on social media, particularly young people whose network is more age appropriate than mine is. That’s our superpower. That’s our better together moment.
Arch Insurance International
And of course, in that context, one of the things that you have recently conducted, the LMG has recently conducted is its Futures Academy, which directly contributes to this idea of ramping up the appeal of the London Market to younger people. And of course, something that Arch itself participated in. Can I get a sense of what the objectives of that initiative were?
Caroline Wagstaff
So the objective was really simple, which is there is a point in student’s career, where they’re starting to think about what the next steps in their life are. Is that to leave school and go into work? Is it to get into an apprenticeship program? Is it to go to university? And that point is at the end of the first year of sixth form, generally. Many people had said to me, when I took the job, and we were talking about talent, well, the thing is, Caroline, you need to go into schools, and you need to talk to students. And I just looked at them, and I said, Well, it’s a great idea but I’m not Dolly the sheep, there is only one of me. And if you worked it out, if I did one school a week through term time, you know, maybe I could do 20 schools a year and then it’s once a year. So it sounds good in theory, but it was clearly not going to be the program that moves the needle. So what we said was this needs to be a journey, we’re going to identify 50 schools around the M25. around London, everybody’s got to be within 40-50 minutes from the city. We’re going to go into the schools and do an hour’s outreach as part of their careers curriculum around specialty insurance. We’re going to build a program which is two weeks’ work experience, they’re going to have something really substantive to put on their CV and so we said to the students at the end of the session, scan this QR code if you’re interested. So we presented to 1000 students, we had about 600 expressions of interest, and we had about 400 people apply. And I went around the market and said, who’s going to take some students? We want you to offer them four days of placement within your firm. And you can take anywhere from, two upwards. There was a sort of horrible moment when I kind of thought, oh, my god, is this going to work? And then I was just astonished by the market support. So we had 35 companies agreed to take students, brokers, underwriters, you know, all sorts. And we did some collective activity in week one, so they got to know something about the insurance industry and what brokers did and underwriters and plus some stuff for them, you know, how to do a CV, what they would be expected in the placement, how to think about their strengths and weaknesses. And we were oversubscribed, I had 120 places promised. So we were able to offer places, we in fact, ended up with 115 students. And they were amazing. They all turned up, we put them in different venues every day, it was hosted in different offices. So one day it would be in the walkie talkie and other day it would be in, 22, Bishopsgate, so they saw some super cool offices. We made it absolutely income neutral, everybody’s train fares were paid, everyone got fed, so that this was genuinely an experience that you didn’t need to worry about whether you could afford the train fare to get in. And the response from everybody involved, has blown my socks off. The kids loved it.
Arch Insurance International
How did they How did they react or respond to it? Because it must have been a very eye-opening experience. This is an industry that I’m assuming most of them knew very little about on it. And it’s pretty exciting when you’re in the middle of it.
Caroline Wagstaff
The nice thing was that they arrived as part of this journey. So they’d had the experience, we’ve done some keeping in touch sessions with them when we’d introduce them to young people who were in the market. So they were really keen, it was interesting, one of the companies, we did a Careers Festival on the last day. So we had 20 companies talking about what opportunities they had available. And one of the companies said to me, it was so nice that we didn’t have to sell insurance as a career to them. They were there.
Arch Insurance International
How do you build on this? Where do you take this?
Caroline Wagstaff
We’re going to do it bigger and better next year, So we’re going to do several things, we are going to do a shorter program in October, because of our 50 schools that were identified, we couldn’t fulfill the demand. I mean, the demand was so great that you know, there were students we couldn’t get to offer a place to. So we want to do something for them in a shorter form in October around apprenticeships. So that will be what the next thing we do. We will do the academy again next year. I want to increase it by 50%. So I’m looking to place 150 students, because the demand was so great that I think, that would be a great thing to do. The curriculum worked really well. We had amazing volunteers from the market, young people, slightly older people, companies hosting. It was an amazing collaborative effort. And it was the London Market at its absolute collaborative best.
Arch Insurance International
I only have one more question for you. And it’s returning to our theme today, this idea of Pursuing Better Together and I wanted to get a sense from you of what that that concept, that idea of Pursuing Better Together means to you personally,
Caroline Wagstaff
I couldn’t do anything that I’m trying to do the LMG without support for the market, whether that’s from the trade associations that are our stakeholders and the corporation of Lloyd’s or whether it’s from specialists, experts in the market, market CEOs, all sorts of people. It is the thing that puts a spring in my step and makes me bounce into work thinking you know, I really love what I do. I love the fact that we can do this together. It absolutely is the manifestation of that statement. And if I ever tried to do anything where I was sort of going rogue on my own, it would very quickly fall apart because that’s not what this is all about.
Arch Insurance International
Caroline it’s a lovely way to bring our interview to a close. I hope that our listeners have gained a more in depth understanding of the workings of the LMG and also its ambitions. I suppose all that is left for me is to say a huge thank you on behalf of Arch for your time with us today.
Caroline Wagstaff
My pleasure.