I’ve loved every minute of it
Without aviation insurance, people can’t fly,” says Mark Skilton, Aon’s chairman of Global Speciality within the firm’s Reinsurance Solutions business.
Therein lies the rub of the entire insurance industry – a sector that, often in the background, keeps the world moving. And in doing so, it often has to move at speed: Skilton explains to me how the Lloyd’s insurance market created a new solution, almost overnight, to respond to the changing world of war and Russia’s invasion of Ukraine.
Reinsurance – which is Skilton’s world – exists on a second level, reducing the risk and volatility that insurers take on. “Think about the aviation industry – the airlines, the product manufacturers, the airports. The size of the insurance they require is so huge that no company or group of companies wants to retain all of that risk,” he says.
“So they transfer that risk, through us, to bring the amount they want to retain down to an acceptable figure. And because there is a high concentration of insurers and insurance brokers in London, there is also a high concentration of reinsurance capital, as well as firms such as ours that can provide access to that reinsurance capital, both in the London Market and around the world.”
Skilton certainly seems to be enjoying what he calls the most interesting market he’s worked in for years. And the sort of things he’s forced to think about show how varied a day in the life of anybody in the insurance and reinsurance industry can be. Take, for instance, nuclear weapons, an area in which evolving technology has caused insurers to reconsider their view of risk.
“Generally, there are automatic cancellation provisions within aviation insurance in the event of a nuclear detonation. But when these policies were designed, everybody was thinking about the five great powers, a great global war, so it made sense that you’d ground all aviation.
“Since then, sadly, there has been the development of nuclear technologies like tactical weapons. So the insurance market has addressed the question: ‘would aviation globally still be grounded?’ If the answer is yes, you’d be grounding aviation that wouldn’t be exposed to the evolving risk, and so insurers and reinsurers responded by developing new products.”
A CHANGING INDUSTRY
Innovation has always been the way of things in insurance – a creativity and willingness to think laterally to reduce risk that has made London the undisputed global capital of the worldwide insurance industry. But the sector has certainly changed since Skilton entered it years ago, straight out of school at 18. For one thing, there’s a lot more work with clients.
“We spend a lot more time looking at business plans, working with clients to see how they’re utilising and maximising their capital,” he tells me.
But the people have changed, too. “When I came into the industry, some areas were dominated by those from public schools, and that’s not the case anymore.”
Equality of opportunity appeals to Skilton, who says that he is fascinated by the diverse range of backgrounds of some of the industry’s most prominent characters. John Charman, the industry legend who another newspaper nicknamed the “king of the London insurance market,” came into the job in the same way as Skilton – and indeed from the same school. Others, like Evan Greenberg, followed his iconoclastic father Hank into the industry, but has made his way very much on his own. It’s a place for all, seems to be the point.
“I love the fact that you can look at this industry, whatever your background, and just achieve so much,” he says.
“THE BEST KEPT SECRET”
“I’ve loved it, I’ve loved every minute of it. For me it’s the best kept secret,” Skilton continues. “When we go out for dinner and I say I work in insurance, people tend to switch off. But I’ll sit there and tell them how it’s actually a fascinating people business.”
Skilton certainly has transferred his enthusiasm – his son is making his own way in the industry, too. His advice to the next generation is to sweat the detail, work hard, and take every opportunity you can.
“Places like Aon give you the opportunity for a true career, to work with clients globally and really build something.”
Certainly, if Skilton’s climb up the ranks – and the fun he’s had doing it – is anything to go by, it’s worth listening to those pearls of wisdom.