Underwriting discipline is absolutely the key throughout the cycles – Matthew Shaw, Chief Underwriting Officer, Tokio Marine Kiln
In this week’s, The Voice of Insurance podcast, Mark Geoghegan chats with Matthew Shaw, Chief Underwriting Officer, Tokio Marine Kiln (TMK), responsible for managing a stamp capacity of one and a half billion pounds at one of Lloyd’s best-known lead markets, Syndicate 510.
Joining TMK last year and a few months after the country went into lockdown, Matthew chats about portfolio management and growth, his views on Lloyd’s Blueprint Two, and algorithmic underwriting’s place in today’s market.
“What I found with TMK very much being a leading underwriter, it is absolutely focused now on underwriting discipline.”
The conversation kicks off with Mark asking Matthew about portfolio management and where the best opportunities currently lie. Matthew comments: “Portfolio management is an absolute continual process, and it should adapt to reflect really where you see the underwriting opportunities, and underwriting discipline is obviously absolutely the key throughout the cycles.”
When asked what it would take to consider going back into business lines it has exited, Matthew replies that it is something that the business constantly challenges itself on to create a diverse portfolio by examining if terms and conditions have changed on those lines they exited.
Speaking further on the subject of underwriting discipline and how it creates fair conditions for customers, Matthew says: “From an underwriting point of view, the critical thing is having that underwriting discipline to charge what you think is a consistently fair and ideally a consistently adequate price from a technical underwriting point of view to make sure that that business is adequately rated to fit your portfolio.”
The innovation edge
TMK is known for being an adopter of innovation, and Matthew expands on how innovation continues to be an integral part of how things are done. Commenting on this Matthew says: “We do very much see ourselves as an innovator, and indeed we’ve recently established a group-wide forum to look at global opportunities, and that involves several of the TM group companies. We spend quite a lot of time in our underwriting committee discussing all sorts of innovative products, and this could be anything from the pre-existing ones, but it could also be parametric products that we’re involved with.”
Expanding on the subject of innovation within the London Market and its competitive edge, Matthew chats about how innovation is reinvigorating the City and its entrepreneurial spirit. As the conversation turns to cost savings in the square mile, Matthew discusses how the new normal of working remotely combined with electronic placement can potentially create new efficiencies: “Ideally, if you combine the 3% savings from the Lloyd’s Blueprint with hopefully some other savings, put those two together we become a more effective and a more competitive environment.”
Speaking further about London’s international position compared to other global hubs, Matthew emphasises that developing underwriting talent and skills are key, commenting on this Matthew says: “I think equally importantly is we do need to have a training ground in London of underwriting talent, and the London market has thrived on the fact that we are a fantastic breeding ground for real quality underwriting talent… I think it’s important that we maintain that across our industry if we are going to remain in the position that we are as a global market. We do have to continue that tradition of being a good training ground for underwriting talent.”
We highly recommend you listen to this insightful podcast as there is so much more that Matthew discusses from diversity and culture at TMK, the future of delegated authority, and the InsurTech phenomenon. When asked about the impact of new technology tools on the market, Matthew responds: “I think one of the keys to it is to have the right products that work for both the carrier and the customer, so you can bring technology to bear to create efficiencies, but ultimately, it’s still got to be the right product for that solution and aimed at the right customers and delivered in what makes it the most cost-effective and efficient way.” We couldn’t agree more.