I'm Ben Pugh, strategy lead for Finex in Great Britain, and I'm delighted to be joined today by Mark Russell-Vick, our Finex GB head of broking. So far this year, we have seen continued volatility in the global macroeconomic environment. Mark, do you want to start by talking us through the current conditions across the London financial lines market and what your expectations are as we move into Q4?
MARK RUSSELL-VICK: Good afternoon, Ben, and thanks for having me here today. Financial lines market at the moment, I guess one would say that it's soft. For me, it's probably more of a stable marketplace. Some might call it a buyer's market, although that's not a phrase that I particularly like.
In cross financial lines, we have multiple lines of business that, in my opinion, travel at different speeds. So, as an example, we have the financial institutions and the PI market, which I would consider to be a stable market. There are pockets of areas where we may see discounts at more of a healthy rate than some others, but generally it's a stable market.
The D&O rating environment is probably more volatile at the moment. We've had an incredibly soft market, probably for the last two or three years. There's been an abundance of capacity that has come into the market, which is pretty much holding those rates down.
We think that we are probably at the bottom of the D&O market rates, expectations that it will probably start to stable and perhaps even if we go into next year, we may start to see some very slight increases.
Lastly, we're looking very closely at cyber. There are some very high profile cyber events that have happened recently. Clearly there's a big question about whether all of those are insured or are they insured up to the true value of those events.
I see that the cyber market, because it's more of a short-tail class versus, say, FI and PI which is more of a long-tail class. I see that cyber has the ability to change their rates pretty quickly. But also it's not just the rates, it's the appetite for the industry sector that may prevail with regards to whether we have more capacity or less capacity coming to the market.
I do think there should be a consideration as we go into next year about limit adequacy. Certainly compared to some of the events that we're seeing in the market, our clients buying significant limits that can cover that eventuality.
There's another factor in there that if you're not buying cyber cover, is that exposing your Ds & Os to a potential claim that arises from a cyber event. So look, I would say that cyber is probably the hottest item we have at the moment. It's probably number, I'd say number three on the list of risk managements that clients are looking at. D&O would be very high up on that. If it's not one, perhaps it's number two.
So I think from our focus, looking closely of where cyber is going to take us, but in general, let's just take the market in general. I think that inverted commas, the softness of the market is in a way created by the fact that we're seeing less new business travel to the London market.
What clients have now is options around the globe. So you'll see clients in Europe, the clients in Asia, USA, Australia, they all have financial lines options locally. So there's a bit of a dynamic going on at the moment where we need to have the markets and us continue to attract business to this London market.
So we need to still be offering the best solution out there, not just a solution. And I'm speaking to the heads of financial lines in the London market, and I think everybody's aware of that. But again, remembering that some of those markets that I'm talking to already have a footprint around the world.
So they're already writing this business locally, which in a way, and I don't like to use the word barrier, but it's a prevention from that business coming to London. So as a London market, we need to continue to innovate and offer best solutions and best products we can to attract that business and we've had a lot of success with our XS facilities, XS A star.
We recently launched ProXS, which is our PI facility and that's really starting to attract business to the London market because it offers something different and dare I say something unique. So we're really excited about that.
BEN PUGH: Thank you, Mark. The general picture then is broadly reducing rates across a lot of our products in FINEX, but that might be starting to level off, particularly in D&O over the coming months. To close with maybe what are your expectations for 2026? Do you think there are any particular developments going on in the insurance market or at Willis that might be interesting for clients?
MARK RUSSELL-VICK: Yeah, it's a very good question, Ben. Thank you. Now I see in 2026 I think will probably be a similar outlook to 2025. I do think that, as I said before, I think that the cyber market has the ability to change quickly from perhaps a soft or stable to a hard market. Time will tell.
But for me, I think it's all about innovation in the London market. In my opinion, I think we are at the forefront of innovation and we have to because if we're not then we're not attracting that business from around the world. So we're looking very closely at algorithm type capacity. We're looking closely at the other areas that can offer better outcomes for clients.
We've also have Gemini, which is our global quota share facility that went live on the 1st of September this year. We see that that is really exciting for us and for our clients. It's about having the ability to offer fast follow capacity that suits a client's need.
It's about speed of service, and we are in a changing industry, and we have to change to keep up with our global clients. And I think 2026 and onwards is going to be very, very exciting for financial lines, but the insurance industry.
Again, the conversations that I have with a lot of the heads of financial lines, they're all looking at how they can grow their portfolios. And it isn't just in the standard underwriting procedure. It's about what can you offer to clients that is different, and it gives them the confidence that the London market is at the forefront of innovation. So yeah, I think 2026 and onwards is really exciting.
BEN PUGH: Thank you, Mark. Definitely agreed. Some very exciting developments to come down the pipeline, particularly for the insurance market as a whole in London. Thank you for your contributions today, Mark, on this episode of The Marketplace Insights podcast. We'll see you in the next one.
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