The London insurance market has spent centuries developing expertise around difficult and unusual risks, building one of the world’s largest centres for commercial and specialty insurance. David Withnell, Insurance & Risk Leader at Independent Broking Solutions, argues that scale has also left the market carrying expensive administrative processes.
It has however accumulated complex processes, highlighted in the Lloyd’s 2025 annual report with an expense ratio of 35.6% (up from 34.4% in 2024). Data is entered, checked, re-entered and reconciled.
Documents are passed between multiple parties and it means brokers, underwriters and claims professionals spend too much time doing work that has little to do with the expertise for which they are rightly valued. Technology has promised to solve this for years, but progress has been, (being polite here) underwhelming.
“AI feels different, as it can read submissions, structure information, compare wordings and just generally help brokers and underwriters find the things that need their attention. In other words, it can deal with friction in the market and reduce that startling expense ratio”, David Withnell noted.
If we get this right, experts will spend less time processing information and more time thinking about risk, challenging assumptions, negotiating coverage and finding solutions.
But if we see AI simply as a way to reduce headcount and process more business, we may remove some of the things that make London successful in the first place. The London Market needs experience, judgement and relationships.
“AI can tell us what a document says, compare it with thousands of other documents and highlight something we may have missed, but it cannot yet take responsibility for a decision, understand commercial context or build the trust that allows a difficult risk to be placed”, Withnell says.
The firms that succeed in the AI will redesign how work is done, decide where human judgement really matters and make sure people remain accountable for the outcome.
The London Market’s opportunity in the AI is to combine tradition and technology.
Is the first rung of the career ladder in the London Insurance Market disappearing as AI takes over the work traditionally given to people starting their career? It makes perfect sense from an efficiency perspective, but it does kind of remove the entry level jobs
In insurance, people have developed expertise by doing the relatively routine work first. They read slips, checked wordings, processed endorsements, reviewed claims and sat alongside experienced brokers and underwriters.
If AI can do that work faster, more accurately and at a lower cost, businesses will inevitably need fewer people to do it, and that’s a problem because today’s junior employees are supposed to become tomorrow’s experts.
And let’s be serious, we can’t remove the work through which people gain experience and then, ten years from now, stand around, pointing fingers and wondering why we can’t find anyone with enough experience.
Maybe we need to evolve into something closer to a professional residency, a bit like medicine, with funded periods of training in which people rotate through key areas of the business, observing experienced practitioners, working on real risks and gradually assuming responsibility.
That’s a big change in approach as it would require firms to accept that developing someone is an investment rather than a source of immediately productive labour. The London Market might even need to do this collectively, with the cost and responsibility shared between the businesses that will ultimately depend on their expertise.
