A slowing economy, changing consumer patterns, increasing debt servicing costs, and tight margins are impacting the financial health of all businesses regardless of size. If their payment discipline declines, this can have devastating consequences for suppliers.  Tough economy driving insolvencies It’s a difficult time for business. For some time, high inflation, labour shortages and growing wage costs have placed significant pressure on profit margins. More recently, rising interest rates have caused further financial trouble for firms. As of August 2023, the Bank of England had imposed 14 consecutive increases in interest rates, with the market anticipating another increase next month. For businesses, these rising rates have dramatically increased the cost of debt servicing. This, in turn, is forcing record numbers of businesses across sectors into administration. Businesses in the retail, wholesale, and food and drink sectors have been impacted harder than others, not least due to their exposure to supply chain pressures, significant energy usage and often highly leveraged business models. According to research conducted by law firm RPC, insolvencies of retail businesses have jumped 56% in the past year alone, to what is a decade high. There were a total of 1,942 insolvencies in the 12 months ending April 2023. Meanwhile, beverage manufacturing saw a 136% increase in the year ending February 2023, with a total of 66 insolvencies. The food production sector fared even worse, with insolvencies nearly tripling to 173 over the same period, up from 64 – the biggest rise among major industries. Payment schedules threaten suppliers The threat of insolvency is likely to affect businesses all along the supply chain. For those able to withstand the pressure, there are opportunities to be had – not least, the possibility of growing market share where competitors have failed. But there are dangers, too. Manufacturers and suppliers of goods – from food produce to clothes garments – typically sell their products to customers and distributors on credit, often with delayed payment terms of between 30 to 90 days. As those customers increasingly enter into financial difficulty, and possible insolvency, there is a growing likelihood that they will be unable to fulfil those credit agreements to their suppliers. Once again, this risk is exacerbated amid a high interest rate environment, which has seen the cost of credit increase. But the economic landscape is not the only pressure on such customers; suppliers’ own financial pressures, and the strategic decisions they take, may also push buyers of goods towards insolvency. To prioritise their cashflow amid a tightening economic environment, many suppliers may opt for shorter payment schedules. Although this ostensibly acts to safeguard the supplier from difficulty, it can have the opposite effect. By amplifying cash flow issues for the buying customer, the risk of default can increase, again threatening suppliers with a potential shortfall. The much-publicised recent demise of a value retailer is one such example. The firm experienced cash flow difficulties following a deterioration in trading during both the pandemic and recent cost of living crisis. Its collapse into administration was then confirmed following at least one insurer’s withdrawal of trade credit insurance. This caused suppliers to pause and reduce deliveries, leaving the retailer with a stock shortage. Global supply chain challenges are also amplifying the trading risk. To avoid disruption, and in an effort to reduce their carbon emissions, many firms are turning towards near-shoring of suppliers. But while this may allow firms to bypass some risk, it also introduces new challenges, including amplifying pinch points within the supply chain. Likewise, the onboarding process for new suppliers has the potential to throw up unexpected difficulties, with disruptive consequences for trading.  Trade credit insurance – payment protection (and beyond) For suppliers looking to mitigate against the risks of buyer default, one option is to take out trade credit insurance. This type of cover offers protection – subject to policy conditions – against the risk of a customer being unable to pay for goods or services provided on credit terms. The level of cover required is requested by the policyholder based on their anticipated exposure. The benefits of trade credit insurance may also extend beyond the protection of non-payment, to include: Giving businesses the confidence to extend credit to new customers who might otherwise be deemed too risky, particularly those overseas (where risks may be greater) Improving access to funding, often at more competitive rates, as it will increase banks’ willingness to lend to an insured customer Ongoing monitoring of the policyholder’s customers, and assignment of credit limits based on those customers’ specific risk exposure (this limit provides the amount of protection the insurer will offer should the customer fail to pay) Providing policyholders with access to an information network – this effectively serves as an early warning mechanism, with the insurer informing the policyholder of any changes that might impact the financial health of their customers, and their ability to pay for delivered goods or services Risk mitigation planning advice To maximise the opportunities afforded by trade credit insurance, existing policyholders should adhere to several fundamentals of best practice. These include the need to report accounts within policy timeframes, as failure to do so may impact upon the validity of a claim. Likewise, actively encouraging customers to share information with insurers will give underwriters greater confidence to extend credit lines to a given firm, which is particularly critical as economic uncertainty increases. Individual credit limits and Insurers Maximum Liability (IML) should also be kept under constant review, to ensure they sufficiently cover a firm’s exposure to its customers. The importance of proactive risk mitigation Amid the growing likelihood of a default or insolvency scenario, it’s wise for suppliers to take mitigating steps to protect their business. Trade credit insurance is one option, but it is not the only means at firms’ disposal. By closely monitoring the end consumer market, suppliers may be able to forecast changing trends ahead of time, enabling them to proactively reduce their exposure, such as by targeting new clients in a less exposed sector. Similarly, suppliers should leverage existing relationships to develop insight into the financial health of their customer base. Engaging with customers to establish trust and facilitate dialogue around cash flow and payment difficulties will allow issues to be flagged early, and enable potential solutions to be found. By building out this information at scale, suppliers can use it to direct their broader business strategy.  For further information, please visit our Retail Practice Group and Food and Drink pages, or contact: Nigel Birney, Head of Trade Credit T: +44 (0)289 034 8322 M: +44 (o) 7917 107441 E: nigel.birney@lockton.com

A slowing economy, changing consumer patterns, increasing debt servicing costs, and tight margins are impacting the financial health of all businesses regardless of size. If their payment discipline declines, this can have devastating consequences for suppliers. 

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Economic uncertainty increases cash flow risk for suppliers

At Lockton, we work closely with our clients to develop innovative risk management programs that minimize risks posed by the increasing frequency and intensity of wildfires. For many homeowners, Lockton recommends participating in a Wildfire Defense Program. This extra layer of protection provides tailored strategies to fortify luxury homes and landscapes against the threat of wildfires. And if damage does occur, rest assured Lockton is here to help with our concierge claims services. What is the Wildfire Defense Program? A Wildfire Defense Program combines cutting-edge technology and proactive measures to create a more robust line of defense against wildfires. These programs are designed to address the unique needs of high-value properties with intricate landscapes and valuable structures. By partnering with specialized firefighting teams, the program offers a range of services to enhance property resilience. Best of all, there is no additional cost to participate. Let Lockton help you determine if this program is right for you – if you don’t have it already - and select the best carrier to fit your needs. Potential benefits Tailored risk assessment: The program often starts with a thorough assessment of the property's vulnerabilities. Professional teams may analyze factors such as topography, vegetation, and construction materials to create a customized wildfire risk profile. This assessment forms the basis for developing a targeted protection strategy.  Advanced fire prevention technology: A mitigation specialist will make recommendations regarding fire prevention technology for your situation. This typically includes fire-resistant roofing, ember-resistant vents, and advanced sprinkler systems that can be activated remotely. These technologies act as an early warning system, rapidly detecting and responding to potential fire threats. Landscape Design and Maintenance: Receive guidance on landscaping choices that can mitigate wildfire risks. This includes recommendations on fire-resistant plants, defensible space creation, and proper vegetation management to create a natural barrier against advancing flames. Environmentally friendly solutions. You, your family, and even your vegetation won’t risk long-term exposure if chemical barriers are needed to protect or defend structures. The gel products used are typically water-soluble and low in toxicity. As an added safety measure, any remaining residue is removed from the site after the event. Emergency Response Plans: The Wildfire Defense Program provides you with step-by-step procedures to follow during a wildfire, helping ensure the safety of both family members and property. The program's rapid response teams are strategically positioned to provide immediate on-ground assistance if needed. Peace of mind: Knowing your investment is better protected by a dedicated wildfire defense program brings an unparalleled sense of security. It allows you to enjoy your properties with less concern about the threat of wildfires. As your dedicated risk management partner, Lockton makes certain your properties are defended against one of nature's most formidable challenges. And we’ll handle any related claims with compassion and efficiency. Contact your account team or a Lockton risk consultant for more details. Coming next, part 3 of this wildfire protection series will focus on ways to minimize the financial impact of rising homeowners’ insurance premiums. If you missed our first blog of this series, you may want to review the 10 helpful hints we provide that could reduce your physical and financial exposures due to wildfire.

At Lockton, we work closely with our clients to develop innovative risk management programs that minimize risks posed by the increasing frequency and intensity of wildfires. 

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Wildfire Series Part 2: Wildfire Defense Program

In the battle to secure, retain, and engage talent, employers have stepped up their corporate wellness offerings. However, by focusing too much on traditional wellness ‘activities’ that fail to consider employees’ actual needs, these investments often miss the target. Wellbeing isn’t a quick fix Ideas of ‘wellness’ or ‘wellbeing’ often mean different things to different people. These ideas will vary depending on an individual’s work and career stage, life, and lifestyle choices, all of which are constantly evolving. Similarly, the landscape of work has changed dramatically over the last few years, along with employee expectations with regards to how work is conducted and balanced with their personal lives. Rather than a static outcome, therefore, wellbeing support should be adaptable to meet these ever-evolving needs. Despite this, research suggests that few employers are offering such support. According to a survey conducted by the Institute of Occupational Safety and Health, 51% of UK employees believe their employer is guilty of so-called ‘wellbeing washing’ – in which employers use ‘quick-fix’ offerings – including free-fruit, gym memberships, and yoga classes to attract and retain talent, while simultaneously pushing staff towards unsustainable workloads, long hours, and burnout. Other such offerings include online ‘wellbeing services’, employee assistance programmes for exclusively out-of-hours issues, or discounts for still-too-expensive holidays. Furthermore, where wellbeing initiatives are offered, they do not always have the desired impact. Research by Claro found that 71% of organisations participate in mental health awareness initiatives, but only 36% of their staff describe the offerings as ‘good’. While it is unlikely that businesses are intentionally ignoring the needs of their staff, they may be swept up in a ‘tick-box’ exercise of providing a wellbeing programme because it is the right thing to do. Without measuring the success of their programme, employers may lack insight into whether it is driving real change or adding value. The net result is that many employers are falling short of employee demands and expectations. Importantly, programmes to deliver wellbeing should not be viewed in isolation, but rather as an integral component of an organisation’s employee benefits offering. This in turn is a key pillar of the broader employee value proposition (EVP), and as such, any benefits or wellbeing offering should be designed and implemented with that symbiosis in mind. A connected strategy  Starting with some basic questions is a great way to build a connected strategy. The following questions may serve as guidance: What is the objective of the EVP and how does it align with the organisation’s business and strategic plans, including any diversity, equity, and inclusion (DE&I) and environmental, social, and governance (ESG) objectives? How well does the employee benefits programme align with the EVP? How does the employee benefits programme align with the actual needs and preferences of the workforce? Are the benefits accessed, communicated, and implemented in an equitable and inclusive manner? Is the benefits programme conveyed holistically, all in one place? It is astonishing what employees will tell their employers when asked the right questions. Start by creating employee focus groups and encourage employees to get involved to talk about what health and wellbeing means to them. Consider undertaking an employee-wide survey and work with employee focus groups to encourage participation in the survey across their work cohorts. To attract, engage and retain employees, organisations must challenge their current benefits and wellbeing programme against five pillars of wellbeing: Physical Mental Financial Social Workplace If the alignment and design of the benefits programme includes authentic, credible, and engaging messaging, the journey towards a thriving workforce can be a short one. Importantly, this requires understanding the demographic of your employees. For example, a younger cohort will have different needs from those in their 40s or older. Targeting a diverse and changing workforce It’s a significant challenge for employers to create a meaningful EVP that is fit for purpose, whilst simultaneously addressing other business priorities, including DE&I and ESG objectives. As above, every employee has different values, motivations, and requirements. Traditionally viewed ‘wellness activities’ such as onsite-massages or yoga are unappealing to many and are not the solution to deliver impactful changes to those most in need. Alternatively, where more ‘progressive’ offerings are provided, such as fertility or gender dysphoria support, organisations may inadvertently create a mismatch with their DE&I strategy, such as by deploying restrictive eligibility criteria or offering the service on a reimbursement basis. Furthermore, spending cards are a novel addition to a benefits offering, redeemable with specific merchants. Whilst great for employee choice, if some of these merchants have sustainability concerns or have known human resource issues (e.g. zero-hour contracts) then a conflict with an organisations’ ESG strategy may arise. In summary, to avoid the risk of benefits/wellbeing washing, your benefits should therefore be designed in a way that addresses employees’ evolving needs across all domains of wellbeing and be connected to the overall EVP and business strategy.  For some organisations, a review of their communications and engagement strategy around an existing offering, communicated holistically, is an excellent first start that can yield a tangible and low-cost impact. Further along the curve, an offering could be re-shaped through a DE&I/ESG lens along with an analytical deep-dive into employee benefits service metrics and employee-led insights. Redefine your approach to employee benefits with an authentic, credible, and employee-centric connected strategy. For further information, please visit our People Solutions page, or contact:

Katherine Gunningham, Client Communications Manager E: Katherine.Gunningham@lockton.com

In the battle to secure, retain, and engage talent, employers have stepped up their corporate wellness offerings. However, by focusing too much on traditional wellness ‘activities’ that fail to consider employees’ actual needs, these investments often miss the target.

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Avoid ‘wellbeing washing’ by redefining your approach to employee benefits

In the battle to secure, retain, and engage talent, employers have stepped up their corporate wellness offerings. However, by focusing too much on traditional wellness ‘activities’ that fail to consider employees’ actual needs, these investments often miss the target. Wellbeing isn’t a quick fix Ideas of ‘wellness’ or ‘wellbeing’ often mean different things to different people. These ideas will vary depending on an individual’s work and career stage, life, and lifestyle choices, all of which are constantly evolving. Similarly, the landscape of work has changed dramatically over the last few years, along with employee expectations with regards to how work is conducted and balanced with their personal lives. Rather than a static outcome, therefore, wellbeing support should be adaptable to meet these ever-evolving needs. Despite this, research suggests that few employers are offering such support. According to a survey conducted by the Institute of Occupational Safety and Health, 51% of UK employees believe their employer is guilty of so-called ‘wellbeing washing’ – in which employers use ‘quick-fix’ offerings – including free-fruit, gym memberships, and yoga classes to attract and retain talent, while simultaneously pushing staff towards unsustainable workloads, long hours, and burnout. Other such offerings include online ‘wellbeing services’, employee assistance programmes for exclusively out-of-hours issues, or discounts for still-too-expensive holidays. Furthermore, where wellbeing initiatives are offered, they do not always have the desired impact. Research by Claro found that 71% of organisations participate in mental health awareness initiatives, but only 36% of their staff describe the offerings as ‘good’. While it is unlikely that businesses are intentionally ignoring the needs of their staff, they may be swept up in a ‘tick-box’ exercise of providing a wellbeing programme because it is the right thing to do. Without measuring the success of their programme, employers may lack insight into whether it is driving real change or adding value. The net result is that many employers are falling short of employee demands and expectations. Importantly, programmes to deliver wellbeing should not be viewed in isolation, but rather as an integral component of an organisation’s employee benefits offering. This in turn is a key pillar of the broader employee value proposition (EVP), and as such, any benefits or wellbeing offering should be designed and implemented with that symbiosis in mind. A connected strategy  Starting with some basic questions is a great way to build a connected strategy. The following questions may serve as guidance: What is the objective of the EVP and how does it align with the organisation’s business and strategic plans, including any diversity, equity, and inclusion (DE&I) and environmental, social, and governance (ESG) objectives? How well does the employee benefits programme align with the EVP? How does the employee benefits programme align with the actual needs and preferences of the workforce? Are the benefits accessed, communicated, and implemented in an equitable and inclusive manner? Is the benefits programme conveyed holistically, all in one place? It is astonishing what employees will tell their employers when asked the right questions. Start by creating employee focus groups and encourage employees to get involved to talk about what health and wellbeing means to them. Consider undertaking an employee-wide survey and work with employee focus groups to encourage participation in the survey across their work cohorts. To attract, engage and retain employees, organisations must challenge their current benefits and wellbeing programme against five pillars of wellbeing: Physical Mental Financial Social Workplace If the alignment and design of the benefits programme includes authentic, credible, and engaging messaging, the journey towards a thriving workforce can be a short one. Importantly, this requires understanding the demographic of your employees. For example, a younger cohort will have different needs from those in their 40s or older. Targeting a diverse and changing workforce It’s a significant challenge for employers to create a meaningful EVP that is fit for purpose, whilst simultaneously addressing other business priorities, including DE&I and ESG objectives. As above, every employee has different values, motivations, and requirements. Traditionally viewed ‘wellness activities’ such as onsite-massages or yoga are unappealing to many and are not the solution to deliver impactful changes to those most in need. Alternatively, where more ‘progressive’ offerings are provided, such as fertility or gender dysphoria support, organisations may inadvertently create a mismatch with their DE&I strategy, such as by deploying restrictive eligibility criteria or offering the service on a reimbursement basis. Furthermore, spending cards are a novel addition to a benefits offering, redeemable with specific merchants. Whilst great for employee choice, if some of these merchants have sustainability concerns or have known human resource issues (e.g. zero-hour contracts) then a conflict with an organisations’ ESG strategy may arise. In summary, to avoid the risk of benefits/wellbeing washing, your benefits should therefore be designed in a way that addresses employees’ evolving needs across all domains of wellbeing and be connected to the overall EVP and business strategy.  For some organisations, a review of their communications and engagement strategy around an existing offering, communicated holistically, is an excellent first start that can yield a tangible and low-cost impact. Further along the curve, an offering could be re-shaped through a DE&I/ESG lens along with an analytical deep-dive into employee benefits service metrics and employee-led insights. Redefine your approach to employee benefits with an authentic, credible, and employee-centric connected strategy. For further information, please visit the Employee Benefits Advisory Service page, or contact:  Tom Curran, Head of Wellbeing, Lockton Ireland E: tom.curran@lockton.com

Last month, the Securities and Exchange Commission (SEC) announced new requirements that public companies disclose material cybersecurity risks more quickly and in greater detail in addition to proactively disclosing details regarding their cybersecurity risk management practices. The rule makes clear that the SEC expects public companies to prioritize cybersecurity — and, like any new requirement, creates risks that organizations must carefully consider and be prepared to manage. Reporting material cybersecurity incidents On July 26, the SEC finalized its rule on public company cybersecurity risk management, governance, and incident reporting. Under the new rule, initially proposed in March 2022, companies listed on U.S. exchanges are required to disclose to investors any material cybersecurity incidents, including providing information about the nature, scope, timing and material impact or likelihood of material impact of those incidents. A registrant is required to make such a disclosure within four days of a determination of materiality, unless the U.S. attorney general has determined — in writing — that disclosure would pose substantial risk to national security or public safety. A materiality determination is to be made “without unreasonable delay.” The rule also requires registrants to: Describe in quarterly and annual earnings statements their cyber risk management practices, including policies to assess, identify, and manage material risks. Where applicable, registrants are also required to disclose how these policies are integrated into their organizations’ overall risk management functions, any third parties that are engaged in connection with said policies, and any processes they have in place to audit third-party vendors that provide cybersecurity risk management services. Disclose any risk, including previous cybersecurity incidents that have materially affected or reasonably likely to affect them. Describe their boards’ processes for oversight of cybersecurity risk and the processes by which boards are informed of such risks, including management’s role in assessing and managing cyber risks. Organizations, however, are not required to disclose cybersecurity expertise represented on their boards. The rule also requires foreign private issuers to make similar disclosures. Managing cyber risk more effectively The new requirements will begin to take effect in December 2023, with smaller companies having until June 2024 to begin compliance. The rule highlights the importance that all public companies have robust cybersecurity risk management frameworks in place. In light of the new SEC rule, companies should consider implementing the following cyber risk mitigation processes: 1. Incident response and business continuity planning. Organizations shouldreview and revise existing incident response and business continuity plans and account for timing and disclosure requirements. If they do not already have such plans in place, now would be a good time to create them. Testing of these plans — whether they are newly created or simply updated in light of the new SEC rule — is essential. 2.Security posture analysis. Organizations should: a. Review their data handling practices and revise them to ensure best-in-class data handling protocols. b. Review and evaluate third-party vendor management programs, including conducting vendor risk assessments. c. Establish good cyber hygiene practices, including regular monitoring of security controls as well as planning and budgeting for information security improvements. 3. Governance policies. Organizations should evaluate existing policies regarding cybersecurity risk management and their oversight of the matter. And even though there is no requirement under the new rule that cybersecurity expertise be represented on boards, public companies should consider if such expertise is needed to support their evaluations and governance. Additional public company risk considerations In addition to taking steps to better manage cybersecurity risks and comply with the new SEC rule, public companies should also be mindful of the possibility of both shareholder litigation and SEC investigations and proceedings in the event they fail to comply. Compliance may be a challenge for some companies, which may not yet be in a position by December to, among other things, describe their processes for identifying and managing cybersecurity threats.  Litigation could also arise against companies that find it difficult to meet the short four-day deadline for reporting incidents following the determination of their materiality. Even if an incident is deemed material and reported within four days, it could prove challenging for companies to provide the required details or make statements that later prove to be incomplete or inaccurate.   —  In addition, litigation could include allegations of misstatements regarding: Companies’ processes for assessing, identifying and managing material risks from cybersecurity threats. Boards’ oversight of cyber-related risks and management’s role and expertise in assessing and managing material risks from cyber threats. Both shareholder litigation and SEC actions could be costly to companies and individual board members. Shareholders appear more eager than ever to find reasons to file lawsuits alleging corporate mismanagement and breaches of fiduciary duties in the wake of any adverse event — especially if a company’s stock price is affected. The SEC has also been especially aggressive as of late. A coordinated approach In light of the new requirements, it’s vital that public companies work with legal, technical and insurance advisors to understand their potential exposures and build frameworks to comply with the SEC’s requirements. To the extent public companies are looking to transfer risk to insurance policies, they should ensure that those policies — including cyber and directors and officers liability (D&O) insurance and possibly other forms of coverage — are well-coordinated. They should also work with their insurance advisors to ensure they have sufficient limits and that policy language meets their coverage expectations.

Last month, the Securities and Exchange Commission (SEC) announced new requirements that public companies disclose material cybersecurity risks more quickly and in greater detail in addition to proactively disclosing details regarding their cybersecurity risk management practices. 

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New SEC requirements should prompt reviews of cybersecurity frameworks and D&O insurance coverage

In 1951, British computer scientist Christopher Strachey designed a program to play checkers on an early computer at the University of Manchester. By the end of 2022, a single generative artificial intelligence (AI) tool was used by more than 100 million people around the world. And through July 27, Nasdaq 100 companies had mentioned “AI” and “artificial intelligence” more than 900 times in quarterly earnings calls this year — almost three times the number of mentions from the same group in all of 2022. Artificial intelligence continues to evolve, with many celebrating its promise in shaping the ways in which we live and work. However, organizations using and/or contemplating use of AI should be cautious, mindful of AI’s potential along with its limitations and risks. Defining artificial intelligence forms Modern AI can take many forms. Among the most well-known are: Machine learning: AI systems that “learn” — in much the same way as humans do — using data and algorithms. Machine learning applications, for example, can translate customer preferences into making product recommendations. Large language models (LLMs): Artificial networks that use deep learning algorithms to understand language and perform a variety of tasks, including carrying out chatbot conversations. Generative AI: A class of AI techniques designed to generate new content, such as images, text, music or even entire simulations that resemble or imitate human-created content. Deepfake: The use of AI to generate digital media to replace the likeness of one person with another. Some of these forms of AI can overlap. ChatGPT, for example, is a form of generative AI backed by an LLM. Generative AI more broadly has attracted significant attention from the public and investors. Just two months after launching on November 30, 2022, ChatGPT had 100 million users. According to Pitchbook, venture capitalists invested $1.69 billion in generative AI in the first quarter of 2023, putting VCs on pace to invest $6.76 billion this year — more than four times the amount they did just three years earlier. Applying artificial intelligence As AI has grown more sophisticated, it’s become a part of daily life for many. Machine learning helps us unlock our smartphones and get turn-by-turn directions. AI drives web search engines and recommendations on social media platforms. And how many of us use LLM-powered voice assistance at home or in our cars? AI applications are now making their way into the workplace. There is vast potential for AI to help organizations improve the quality of their work product, become more efficient and find cost savings. Early adopters of AI include: Manufacturers, which can use AI to introduce predictive maintenance of critical equipment and automation to improve efficiency and productivity. Healthcare organizations, for which AI can aid in diagnosis, drug discovery and development, training, administration and research. Financial institutions, which can use AI to process loan applications and insurance claims, detect fraud and predict investing strategies. Retailers and travel companies, for which AI can analyze customer data to provide personalized recommendations, automate marketing activities and power virtual customer service agents. Real estate companies, which can use AI to analyze market conditions, determine property values, process lease agreements and mortgages and introduce smart technology to properties. Logistics and transportation companies, for which AI can manage supply chains and automate sorting, packaging and delivery As organizations capitalize on these opportunities, however, the associated risks may not yet be well-understood. New areas of risk As AI applications change and their use expands, concerns are arising over a variety of evolving and emerging risks. A key risk surrounds AI tools’ mass collection of personal data, including personally identifiable information (PII), and the associated privacy concerns. As data is collected, stored and manipulated by AI, there is a risk of a possible data breach or other cyber event, which could have increasingly severe consequences as governments develop more stringent privacy regulations. There’s also the possibility of algorithmic bias, an oft-cited concern around the use of AI in diagnostics and other healthcare applications, in facial recognition tools employed by retailers and others, or when used by financial institutions for diligence and underwriting decisions. Algorithmic bias and other risks could also rear their heads in human resources applications of AI. While chief human resources officers have an opportunity use human capital analytics and other tools to understand workforce productivity and drivers of employee engagement and ultimately shape the workforces of the future, they must be mindful of these tools’ potential racial and gender biases and potential accessibility issues for employees, which could give rise to claims of discrimination. Other key risks AI users must be aware of include: Questions about the ownership of AI-developed content and the possibility that such content could infringe on others’ intellectual property rights. The possibility that generative AI tools, while seeming to be confident, persuasive and precise, can in fact produce inaccurate, biased, or even offensive content. In cases where the use of an algorithm can disrupt or harm lives, questions about who is legally responsible — the algorithm’s creator or the organization using it. The possibility that AI can be used for social engineering purposes — for example, a deepfake being used to impersonate or defraud an individual. Growing oversight Organizations must also contend with an increasingly complex global regulatory landscape. In the U.S., the Biden administration and Congress are actively engaged in efforts to build guardrails around artificial intelligence (AI), while seeking to ensure that innovation can and will continue in the private sector. Last month, the White House announced voluntary commitments from seven leading tech companies to move toward safe, secure, and transparent development of AI technology. The companies pledged to ensure their products are safe before introducing them for public use, build systems that emphasize security, and develop mechanisms that will ensure users are told when content is AI-generated. This fall, the Senate will host a series of AI "Insight Forums" covering multiple policy areas, including copyrights, workforce issues, national security, high-risk AI models, existential risks, privacy, transparency, explainability, and elections. The forums will include discussions involving AI industry leaders and critics about the government's role in AI. Meanwhile, more than a dozen states have adopted resolutions or enacted legislation related to AI. Many of these states have focused on: Governance and the protection of civil rights; Transparency around AI’s decision-making process; and Clear enforcement mechanisms. Internationally, the European Union and China are leading the charge of creating frameworks to regulate AI. In June 2023, the European Parliament took a major step by finalizing draft rules to establish parameters for providers and users of AI depending on risk levels. The EU seeks to reach an agreement on the law’s final form by the end of 2023. In China, rules regulating generative AI are set to take effect on August 15. While the EU and China will likely be the first to enact regulations governing AI, both jurisdictions may have to amend and refine their initial regulations as the risks and technology evolves. Other jurisdictions around the world will also likely consider and propose laws to regulate AI as the technology advances and adoption rates increase. How to move forward with AI To manage risk associated with AI, organizations should be asking the following questions: Do we use AI technologies or are we contemplating the use of AI technologies? Do our vendors use AI technologies and what are the contractual terms regarding our potential liability because of our vendors’ use of AI technology? What are the security risks associated with the particular AI technology we are using or contemplate use of? What are our regulatory compliance obligations because we use AI technology? Are risk transfer mechanism available to help mitigate risk associate with using AI technology? For more on AI risks, contact your Lockton advisor. And watch more content on lockton.com about AI’s applications and risks across several industries and corporate functions.

In 1951, British computer scientist Christopher Strachey designed a program to play checkers on an early computer at the University of Manchester. 

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As AI’s risks loom, organizations must proceed with caution

Life sciences firms’ increasing use of sensitive consumer data, valuable intellectual property, and high turnovers make them a potentially lucrative target for cyber criminals. Where cyber-attacks are successful, the cost of damages can be severe; according to IBM, the average cost of a data breach in the pharmaceutical sector in 2023 was $4.82 million, and was $10.93 million in the healthcare sector.  The below provides some detail around the potential implications of a cyber-attack for life sciences firms, and offers some guidance for proactive cyber risk management. Intellectual property theft For brick-and-mortar business, physical assets such as goods and premises play an important role in the company’s value. For life sciences firms, this is not the case. Rather, it is their intangible assets – such as intellectual property (IP), patents, copyrights, trademarks, and proprietary technology – that are of highest value. Theft of IP represents an existential threat to any life sciences firm, no matter its size. Following a successful theft, firms may find that critical IP is in the hands of a competitor. What’s more, the affected firm may not realise a theft has taken place until it is already too late. Competitors may use the stolen IP to bring a product to market faster, to innovate a more advanced product, or undercut profit margins. In all cases, the victim of the cyber-attack could lose all competitive advantage in the marketplace, leading to unrecoverable losses. There may also be indirect losses as a result of IP theft, such as the violation of third-party contracts, legal costs, and reputational damage. Compromise of personal data The effective deployment of data analytics is a central component of life sciences growth. By collecting and processing large volumes of complex data, life sciences firms can optimise research and development, create more advanced products, and improve return on investment. Furthermore, by embedding data collection and access within consumer devices – such as sensor-based continuous glucose monitors – firms can transform the quality of care and patient outcomes. The usefulness of personal data makes it of high value to cyber-criminals, who may seek to steal sensitive information through ransomware and malware attacks. Often, these attacks will deprive life sciences firms of access to their data, before demanding a significant ransom to secure its release. Where firms are found to have taken insufficient steps to protect against data theft, they may be exposed to regulatory fines. For instance, UK- or EU-based firms, or firms processing the data of UK or EU citizens, may be fined under the General Data Protection Regulations (GDPR), where stolen data is classed as personally identifiable information (PII). For life sciences firms, this may include patient or volunteer medical records, or any data processed for the purposes of scientific research. The threat of life sciences firms suffering personal data theft is likely to be exacerbated where firms participate in the sharing and exchange of confidential information with research partners. Clinical trial data theft The cyber risks to clinical trial software are similar to other forms of software, and include theft of personal data and ransomware attacks. However, cyber criminals attacking clinical trials may also wish to destroy or tamper with patient data. This may cause delays to the trials, and hinder the rollout of new technology or medicine. Worse, where hackers tamper with a wearable medical device, it may put a patient’s health at risk. Notably, data does not necessarily have to be destroyed or amended for it to become invalid. Access to the data alone by a cyber-criminal may be enough to render it invalid, as signs of tampering won’t always be apparent. Attacks on clinical trials can also cause significant financial loss for the sponsors of clinical trials, where a loss of trial data or intellectual property occurs. Business interruption A cyber-attack against a life sciences firm may involve the encryption of vital operating systems. Affected firms may be unable to continue business-as-usual operations, including research and development into new drugs, production of vital medicines, or processing of user data. Supply chain infiltration Typical life sciences organisations operate complex supply chains, often involving the outsourcing of specialist functions such as research and development. This creates several points of exposure that cyber-criminals may look to exploit, and which if attacked, could have knock-on consequences for the firm concerned. For instance, the products or data provided by a supplier could be critical to the delivery of a vital drug or medicine. Should that supplier suffer a significant cyber-attack, a life sciences firm may not have the raw materials or ingredients required to continue production or meet consumer demand. Third-party suppliers are also more likely to operate outdated IT systems, or lack the technical support required to quickly combat cyber-attacks. Once a supplier’s systems have been infiltrated, hackers may also be able to gain access to those belonging to their partner organisations. “A ransomware attack can be nothing short of devastating for a business. It can lead to lost revenue, reputational damage, and in some cases, permanent data loss. The impact of ransomware on the cyber insurance market has been significant, too, as the number of claims made by organisations continue to grow. In Q1 of 2023, our security partners Kroll noted a 56% increase in the number of unique ransomware variants observed, with phishing continuing to lead the pack when it comes to initial access across all cases.” Jack Bassett, Assistant Vice President, Lockton Global Cyber & Technology Securing the life sciences against cyber threats Given the threat facing life sciences firms, measures to limit the risk and potential damage of a cyber-attack include:  Ensure access to expert internal IT resources and external specialists to assist with implementing, monitoring, and updating technical security measures. Implement multi-factor authentication (MFA), requiring authorised users to provide more than one method of validating their identity, whether that be a link sent via SMS or the use of an authenticator app. Regularly test networks and systems for vulnerabilities. Restrict access to critical data to a small number of trusted employees in order to better track points of access and minimise risk of a security breach.  Build medical devices with cybersecurity in mind from the earliest stages of design. Conduct supply chain mapping to build out an understanding of which third parties are being engaged, the nature of the services they provide, their access to underlying data and information. This can be used to identify and remove ‘high-risk’ suppliers and partners. Train employees to recognise and avoid common cyber threats, such as phishing emails and malicious links, and ensure they are aware of their obligations to maintain the security and confidentiality of data and information. Create a cyber response plan to limit the impact of a cyber-attack should one occur by mobilising ‘first responders’ and proceeding with containment activities. Cyber insurance for life sciences firms A well written cyber insurance policy provides you with a risk transfer solution to protect your business against damages associated with a cyber-incident, including both first party and third-party coverage, as well as access to incident response experts:  Practical support in the event of a data breach, including forensic investigations to identify what went wrong and whose data has been put at risk. We also provide support and legal advice on notifying clients and regulators and can introduce you to post incident public relations support. Compensation for loss of income should a hacker target your business and prevent you from carrying out your usual business activities. Payment of costs associated with regulatory investigations should you breach GDPR regulations and fail to keep your client data secure. Reimbursement for the cost of repair, restoration, or replacement if a hacker causes damage to your websites, programmes, or electronic data. Cyber extortion protection, should you receive a ransom demand from a hacker who has hijacked your computer system. Notably, although life sciences firms’ IP is a likely target of a typical cyber-attack, cyber insurance itself does not cover the loss of IP. Instead, dedicated IP insurance can provide cover   for the revocation of intellectual property rights, liability (including settlements and damages), emergency costs, defence and investigation costs, and product withdrawal. For more information, please visit our Lockton Life Sciences page, or contact: Darci Edwards, Business Executive of Life Sciences T: +44 (0)117 906 5016 E: darci.edwards@lockton.com

Life sciences firms’ increasing use of sensitive consumer data, valuable intellectual property, and high turnovers make them a potentially lucrative target for cyber criminals. Where cyber-attacks are successful, the cost of damages can be severe; according to IBM, the average cost of a data breach in the pharmaceutical sector in 2023 was $4.82 million, and was $10.93 million in the healthcare sector. 

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Managing cyber risk for life sciences firms

In April, meteorologists at Colorado State University forecast a slightly below-average 2023 Atlantic hurricane season. For the season, which officially runs from June 1 through November 30, CSU predicted 13 named storms, including six hurricanes, two of which they expected would become major storms of category 3 or above on the Saffir/Simpson scale. Through the end of July, four named storms have formed, including one category 1 hurricane (Don). Importantly, no tropical storms or hurricanes have made landfall in the U.S. so far this year, sparing businesses from potentially costly physical damage in an already difficult property insurance market. Based on activity so far this year, one might conclude that CSU’s initial forecast was correct, and that we can expect calm for the rest of the season. Other developments, however, suggest that businesses must stay on alert rather than risk becoming complacent. August through October likely to be active Nearly 80 years of hurricane data analyzed by the National Oceanic and Atmospheric Administration (NOAA) indicates that August through October is typically the busiest part of any hurricane season. And there are at least three reasons why organizations must stay vigilant for the remainder of this year’s season: 1. High ocean temperatures.“The global ocean has been record warm in 2023,” NOAA recently reported, with high temperatures recorded in the Pacific Ocean, North Atlantic Ocean, Caribbean Sea and Gulf of Mexico. In the Florida Keys, for example, water temperatures reached as high as 92.48° on July 13. CSU cited “record warm sea surface temperatures” in the Atlantic as a reason for revising its forecast on July 6; researchers now predict an above-average season in 2023. 2. Persistent and pervasive drought conditions. As of July 25, abnormal dryness and drought were affecting 44.9% of the U.S. population, according to NOAA. Affected regions included hurricane-prone portions of Florida and the Gulf Coast, where even a 30-mph wind — far below the hurricane standard of 75 mph — can knock down trees that have been weakened by lack of water. That means that a storm today can result in more severe damage than in a typical year. 3. The power of a single event. Regardless of how many storms actually form and make landfall this year, just one can have devastating effects on a company and its bottom line. Preparing for potential claims As you stay on alert for hurricanes and tropical storms during the remainder of 2023’s hurricane season, one area where you can focus efforts is on preparing for potential claims. An experienced insurance broker can help you organization potential claims, use internal and external resources to assess potential damage and costs, and accelerate your recovery. Before you suffer a loss, it’s important you are ready to: Immediately report a loss. Be broad in describing the type and extent of damage suffered, and specify the date of a loss and any affected locations. Put your claim team into action. This team may include your risk manager, your broker’s property claim advocate and several department heads within your organization. Document physical damage. Photos, videos, news reports and social media posts can all be useful here. A good best practice is to create accounting codes to track any expenses you’ve incurred to recover. Assessing damage, disruptions and financial impacts. Consider the possible impact of a storm on your inventory, supplies, finished products and work in progress. And known that a full restoration of your business may take time. For more information or help in managing a hurricane or tropical storm loss, contact a member of your Lockton team.

In April, meteorologists at Colorado State University forecast a slightly below-average 2023 Atlantic hurricane season. 

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3 reasons to stay on alert for the rest of hurricane season

The failure of a contractor or key subcontractor during the construction period can have severe consequences for the developer or main contractor, potentially causing delays and reputational harm or leading to damage to incomplete works and materials. Amid challenging economic climate extra steps need to be taken to prepare for such a scenario. This briefing note reviews the key issues from the developer’s perspective. However, where there is an insolvency case in the supply chain many of the issues and remedies discussed herein apply equally from a main contractor’s perspective. Rising risk Construction firms have struggled with high inflation, labour shortages and higher wage costs for some time and this is placing significant pressure on margins. More recently, rising interest rates have caused further financial trouble for firms, as debt servicing costs have increased significantly. This is forcing record numbers of businesses into administration. In May 2023, construction-related insolvencies in the UK rose by 65 per cent compared with the previous month, and by 34 per cent compared with May 2022, according to latest official data from the Insolvency Service. Elevated insolvency rates in the construction sector show little sign of abating. Data collected by insurance firm Atradius revealing a 41% increase in late and failed payment claims in Q2 2023 compared with Q1, and a 178% increase year-on-year.  Potential consequences of a contractor’s failure Where the insolvent firm is a contractor, it creates significant complications for any project in which they were involved. For developers this can bring a number of potential consequences, such as: Project delays and halting of work while a new contractor is selected Concerns around the quality of works prior to the contractor’s failure, complicating the process of hiring a new contractor and allocating liability Unbudgeted additional project costs such as rectifying issues discovered post-insolvency, the increased costs of finding a replacement contractor and increased debt service costs through lost construction time Impact on available building warranties Supply chain disruption as a consequence of reduced cash flow Maintenance of relationships with the existing supply chain to ensure programme continuity, including the relationship with any replacement contractor Redemption of callable surety bonds where contractor failure is specified as a condition Uncertainty regarding impending or current claims, including notification issues where claims have not been notified promptly or have been avoided, potentially resulting in an inability to recover the loss Security issues if the site is dormant, inviting unwanted visitors and subsequent theft, damage or liability exposure Developers who had relied on a contractor’s annual contractors all risk (CAR) policy may now need to procure new cover. This can result in cost duplication, worse pricing conditions, or even an inability to find cover Developers who had relied on a contractor’s third-party liability (TPL) cover will assume liability for any injury or damage of material General reputational damage to the project and its owners arising from any of the points above and their own perceived failure to deliver Insurance considerations upon contractor failure These can be split into two risk areas: Insurance of risk and work post insolvency Claims arising out of the work already carried out/completed Insurance of risks and work post insolvency Replacement of an insolvent contractor is seldom completely straightforward and issues around indemnity and insurance are just another of the myriad of issues. The design of the insurance programme prior to insolvency will influence considerations in the post insolvency environment. Which insurances, if any, have survived the insolvency event and does the developer need to replace any cover where previously they had relied on the contractor? Additionally, any new contractor will have concerns around picking up liability for the design and workmanship of a newly insolvent contractor who may have been treating risk differently. Often this leads to new costs being incurred to check the adequacy of designs and/or investigate the quality of workmanship performed to date. Sites that have become dormant may also develop new issues, especially where there has been unplanned exposure to the elements. Where placement or replacement of any element of the insurance programme is required, prospective insurers will have similar concerns. Underwriters may wish to understand the potential for further supply chain issues, especially if existing subcontractors have been impacted by non-payment or need to be replaced. New insurers will therefore scrutinize requested project information to ensure they are not picking up any problem elements left behind as a result of the insolvency. Claims arising out of already carried out work or completed Following contractor insolvency, the developer inherits risks that were previously owned by that contractor. For example, the insolvent contractor will no longer rectify issues and any potential third-party claimants will now direct their claim against the developer. The developer must therefore maintain a dual focus on exposures arising out of the work undertaken to date as well as project completion. Unfortunately, where workmanship failures are subsequently identified and damage has not yet manifested, the developer will struggle for recourse against the Contractors All Risks policy.   Prior to insolvency the contractor may also have failed to comply with the claim notification procedures under their policy of insurance – typically these may be strict and require immediate notification or within a specific time limit. The failure to notify may have arisen due to a number of factors. These may include lack of adequate controls, greater focus on other business critical activities, or simply a decision to put off notifying claims or circumstances in order to avoid increased premiums at renewal. Whatever the reason, any failure to notify may have breached notification requirements which may in turn lead to the claim being rejected. Following insolvency, administrators will usually act quickly to secure any funds they can against the business. This usually includes cancellation of existing insurance policies and securing return premiums where possible. Unfortunately, this creates a position whereby developers and other claimants join the line of unsecured creditors and lose the benefit of the safety net that had been provided by the contractor’s insurances. Mitigating against contractor failure Much of the risk highlighted above can be mitigated through a combination of tracking financial strength and, for contractors, continual supply chain monitoring. Measures to protect against and limit the impact of contractor failure include: Follow a tight and transparent qualification and contractual process Procure owner-controlled project insurance to ensureall parties are fully protected (backed by contracts that provide those parties with access to the cover). This offers full control of the insurance programme while ensuring continuity of cover until project completion Continually monitor finances of contractors and key supply chain members Regularly review contractors’ key performance indicators (KPI’s) Maintain payment discipline to ensure supply chains hold a healthy cash flow Track and carefully review supply chain insurances annually to manage quality control and reduce claims cost Keep detailed records to assist in lodging claims Notify or require notification of claims under construction insurance policies promptly, or at least as soon as it is reasonably practical Where claims or circumstances arise that may lead to a claim against a contractor or supplier, confirmation should be sought that their insurers have been notified. This is especially true for professional indemnity insurance and any others that respond on a ‘claims made’ basis. If an issue is not notified prior to insolvency the policy may be cancelled by administrators and the opportunity to claim lost. Contractually oblige Contractors and/or critical Sub-Contractors to provide a performance bond. This would usually be for 10% of the contract sum. Consider the benefits of use of a Latent Defects insurance as it ensures that the project is properly audited/surveyed at all key stages and defects are identified early. If debt is involved in the project, consider requesting that the owners purchase delay in start-up (DSU) insurance along OCIP as an increasing number of lenders are requesting it For further information, please visit the Lockton Global Real Estate and Construction page, or contact: Richard Alford-Smith – Senior Vice President Global Real Estate & Construction E: Richard.Alford-Smith@lockton.com  Michael Bogdan – Partner, Lockton Global Energy & Power (LGE) E: michael.bogdan@uk.lockton.com

The failure of a contractor or key subcontractor during the construction period can have severe consequences for the developer or main contractor, potentially causing delays and reputational harm or leading to damage to incomplete works and materials. Amid challenging economic climate extra steps need to be taken to prepare for such a scenario. This briefing note reviews the key issues from the developer’s perspective. However, where there is an insolvency case in the supply chain many of the issues and remedies discussed herein apply equally from a main contractor’s perspective.

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Protecting construction projects against contractor failure 

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Lockton, the world’s largest independent and privately held insurance brokerage, reported revenue growth of 17% on a constant currency basis, with reported organic revenue growth at 16% for its fiscal year ending April 30, 2023. Lockton reported global revenue of $3.1B compared to global revenue of $2.7B in fiscal 2022. Revenue growth metrics are presented on a constant currency basis.    The company’s strong FY23 revenue growth was posted while lapping record organic revenue growth of 27% in the prior fiscal year. Lockton’s U.S. operations, international operations and global reinsurance business all posted double-digit organic growth, exemplifying the strength of an increasingly diversified platform.    “The Lockton family is proud to perpetuate the company’s private ownership generationally,” said Ron Lockton, Executive Chairman. “Our continued commitment to a lower margin and reinvesting in client resources, talent and culture, drives great momentum and opportunity for our people. This growth is a direct outcome of the passion our teams exhibit for bringing the best solutions to clients.”  In fiscal year 2023, Lockton expanded its geographic footprint with new offices in Colombia, Oman, and Sweden, and bolstered its presence in Brazil with the recent acquisition of THB Brazil. This was in addition to significant investments and recruiting of top talent in cyber, Private Risk Solutions, marine and financial services solutions. Lockton’s benefits practice also transitioned to People Solutions reflecting Lockton’s holistic approach to helping clients be more successful by making their employees’ lives better.   “Jack Lockton founded Lockton Companies in 1966 and believed that intense client focus, creating a caring culture, empowering people and remaining private would combine to create a special place for clients and exceptional talent,” said Peter Clune, CEO. “Our exponential growth is a result of us staying true to his business philosophies combined with the will of our people.”  Lockton’s award-winning culture is recognized around the globe, including being certified as a Great Place to Work in Australia and Mexico, being awarded the highest honor by b-Heard in the U.K., and being recognized among the Best Places to Work in Insurance for 14 years in a row and as a U.S. Best Managed Company for three consecutive years. 

Private ownership, long-term strategy drives double-digit growth for Lockton. Lockton's EOY results

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Private ownership, long-term strategy drives double-digit growth for Lockton

Lockton, the world’s largest independent insurance broker, is pleased to announce that Chuck Jainchill has joined as U.S. Cyber & Technology Product Leader. In this critical role, he will lead Lockton's efforts in all aspects of cyber and technology errors and omissions (E&O) products. With his extensive experience, he will manage Lockton's insurer relationships, develop innovative market-leading products for Lockton clients, and provide invaluable support to broking teams as the lead coverage resource. Additionally, Jainchill will collaborate closely with Lockton's claims, risk consulting, and data and analytics teams to deliver cutting-edge cyber solutions for clients. Based in New York, Jainchill will report to Michelle Faylo, Lockton's U.S. Cyber & Technology Practice Leader.  "I am thrilled that Chuck is joining Lockton's growing cyber team,” said Faylo. “His profound technical expertise and legal background make him a perfect fit for our organization. With his arrival, our clients and associates will benefit greatly from his knowledge and experience."  Jainchill joins Lockton after 16 years at AIG, where he most recently served as the Global Cyber Product Development Leader. Prior to that role, he held the position of Division Counsel of the Professional Liability Division for AIG Financial Lines. Before his time at AIG, he worked as an attorney in private practice, including in the corporate litigation department of Skadden Arps Slate Meagher & Flom.  “Lockton's commitment to independence and client-focused approach have solidified its position as an industry leader and a dynamic workplace," said Jainchill. “I look forward to working with the entire cyber team to serve clients and provide tailored solutions that align with their business needs." 

Lockton, the world’s largest independent insurance broker, is pleased to announce that Chuck Jainchill has joined as U.S. Cyber & Technology Product Leader. 

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Lockton strengthens Cyber & Technology team with the addition of Chuck Jainchill as U.S. Cyber & Technology Product Leader 

Lockton, the world’s largest independent insurance broker, today announces the appointment of Mark Drummond-Brady as Advisor to the Senior International Leadership Team. He joins Lockton on 1 July 2023 and will provide advice and counsel in support of Lockton’s continued growth plans.  Mark will add highly valuable insight to the international leadership, having enjoyed a career of more than 40 years in the insurance sector. Mark began his career in 1981 as a broker at the former Hogg Robinson after serving in the British Army. Mark joined Lloyd Thompson Plc in 1987, ahead of the merger which created the Jardine Lloyd Thompson Group (JLT Group).  Mark went on to hold a range of senior leadership roles, before becoming Executive Director of JLT Group in 2010. Mark then took on the role of Vice Chairman at Marsh, following Marsh McLennan’s acquisition of JLT Group in 2019. He played a key role in successfully integrating Marsh and JLT before resigning in 2022. In addition, Mark served as Chairman of the Lloyd’s and City of London branch of the Royal British Legion between 2007 to 2022, and spent two terms on the board of the Council of Insurance Agents and Brokers (CIAB). Chris Brown, President of Lockton International, said: “Mark is a leader in the insurance industry, having been at the forefront of it for nearly four decades. His exceptional level of market knowledge, industry acumen and counsel will be invaluable as we continue to grow. Welcoming someone of Mark’s calibre to our senior leadership team is a statement of intent and will further support our development as a business and our client focus.” EJ Hentenaar, European Chief Executive Officer of Lockton, said: “Mark shares so many of the values of Lockton, bringing with him the knowledge and experience that our Associates, Clients and Trading Partners will recognise as invaluable to us. Lockton continues to attract great talent from within our industry as well as outside of our market. Mark’s arrival will allow us to continue to grow, whilst never losing sight of the approach, values and culture that make us different.” Mark Drummond-Brady said: “I am delighted to be joining Lockton at such an exciting time for the business, having watched it progress from afar for several years. Lockton has even more ambitious growth plans, which are credibly grounded in its impressive performance in recent years. Lockton remains proudly independent and has retained its values, which sets it apart from many peers in the market and provides a solid foundation as the business continues to scale. I look forward to working closely with the executive team to maintain this momentum.”

Lockton, the world’s largest independent insurance broker, today announces the appointment of Mark Drummond-Brady as Advisor to the Senior International Leadership Team. He joins Lockton on 1 July 2023 and will provide advice and counsel in support of Lockton’s continued growth plans. 

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Lockton appoints Mark Drummond-Brady as Advisor to the Senior International Leadership Team

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Visionary technology risk executive Manpreet Gill joins Lockton 

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Visionary technology risk executive Manpreet Gill joins Lockton

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