The bottom line: RPC's Simon Laird discusses the changing nature of insurance law - advertising feature

Advertising feature, sponsored by RPC

“Being a valued legal adviser for the insurance market boils down to one thing: understanding the business of insurance.”

That’s the view of newly-appointed Head of Insurance at RPC, Simon Laird, who took over from the previous incumbent James Miller. Miller was elected to RPC’s top job as Managing Partner at the end of January last year.

That requirement for more in the way of practical, commercial advice should come as no real surprise in what is an increasingly competitive marketplace, both for insurers themselves and those who advise them.

Much like the legal sector, insurance has undergone a wave of consolidation over the last few years. The most recent example saw AXIS acquire Novae, a deal which followed other big mergers like Liberty and Ironshore, XL and Catlin, Ace and Chubb, and Mitsui and Amlin.

“For insurers, it’s a challenging environment in which to make profit,” says Laird. “That’s largely driven by the combination of prevailing soft market conditions, an abundance of capital, and the historic low rates of interest we’ve got used to since Lehman.”

That pattern of consolidation has been mirrored amongst those firms which advise the insurance market, with the merger of Clyde & Co with Barlow Lyde & Gilbert probably the most notable tie-up of recent years.

“Most insurance companies now run very sophisticated panel processes, often with the help of procurement specialists,” says Laird (pictured). “The combination of fewer insurance companies and an understandably tighter control on costs means the pressure is on law firms more than ever to really get to the heart of what adds value to their insurer clients.

“And increasingly that comes down to focusing on the numbers. Yes, being specialists in the law is still critical, but delivering legal advice that is not set in the context of your clients’ business is simply commercially unacceptable in the current climate.”

Despite the challenging conditions, the work is still out there for law firms. RPC is an example of a firm which has invested in growing its insurance practice in an environment where many others are contracting. The firm’s latest move saw it hire Partner duo Naomi Vary and Karen Morrish from US firm Sedgwick, having made up two of its own in May 2017.

Laird is bullish about RPC’s own strategy: “We’re growing across all of our offices,” he says. “We’ve taken a different approach to some of our competitors, choosing a combination of organic growth and select hiring of high quality people who share our commitment to flexibility and collegiality.

“London is still our headquarters, but our offices in Hong Kong, Singapore and Bristol have been real success stories over the last five years.”

RPC’s office in Bristol now numbers almost 140 giving clients, as Laird describes it, “a credible, high quality, and flexible alternative” to its London offering.

“Broadly there is London work and out of London work,” says Laird. ”London work tends to be large, complex, international disputes. Bristol now handles most of the UK PI and property losses outside of that on the basis the work is cost sensitive.

“We also provide a dedicated SME D&O offering in Bristol. With better technology and good transport links, we maintain a joined up and clear offering to our clients which might otherwise be diluted by multiple offices.  That said, we’re watching Manchester carefully and if our clients there require our permanent support in the city then we will obviously look carefully at that option.”

It’s the international play which has seen RPC take the most divergent strategy from its rivals, with only two offices outside its home jurisdiction.

“The reality is that over a third of our insurance business is international in nature,” says Laird. “We have worked with 125 insurance law firms across 86 countries. Rather than open in every jurisdiction around the world – which is expensive and brings challenges of cultural integration – we have adopted a more nimble model.”

You’ll see law firms like ours recruiting technical claims experts and investing heavily in claims management systems

“Whilst it might not grab the headlines in the same way, most importantly we are able to give our clients what they need: access to the best local lawyers for the job at that moment in time.  We take responsibility for service standards, reserving and strategy but across London, Hong Kong and Singapore, we partner with the best in breed. Having that flexibility has worked well for us.”

So, where does Laird see the market moving in future?

“It’s not a particularly new phenomenon”, he says, “but we’re definitely seeing insurers increasingly outsourcing parts of their claims functions so that their core claims team can focus on those parts of the job that add most value to customers. It’s important we respond to that kind of change, which is why you’ll see law firms like ours recruiting technical claims experts and investing heavily in claims management systems.”

Unsurprisingly, technology more generally is a recurring theme, with more and more InsurTech companies starting up and working alongside, if not in competition with, the traditional insurance market as they strive to compete on levels of service. In this, RPC is rare – if not unique – in that it owns its own InsurTech business founded on its capital modelling product Tyche.

“The acquisition of Tyche formed part of our overall strategy to add new and innovative ways of delivering value to our insurer clients’ businesses,” says Laird. “We now have a genuine full-service offering which goes way beyond pure legal advice – claims or commercial – and gets to the heart of delivering commercial advantage through the c-suite.

“We’ve long been recognised as one of the leading players in the market, but the pressure to develop and innovate is relentless. But it’s that pressure that brings the most out of our people and, arguably, where the real job satisfaction lies.”