Commentary: Lloyd's location provides a little extra insurance
Insurance departments cling close to Lloyd's, despite high costs of EC3 premises
May 31, 2006 at 08:03 PM
3 minute read
Consider this for a managing partner headache – an important but somewhat niche practice complains for years about the firm's London location before eventually winning the war of words and renting new office space. The move may well create division and logistical hassle, but most frustrating is the fact that the new office, which generates more rent payments and potentially leaves unused space behind, is less than a mile away from the HQ.
This unusual scenario is exactly what has recently occurred at CMS Cameron McKenna. The firm is re-housing just over half of its 65-lawyer insurance team in an outpost closer to the all-important Lloyd's of London from 1 July.
The move has even led to some outside claims that the insurance team, feeling unloved by Camerons' management, was looking for a transfer, though some reliably off-message insiders convincingly refute such assertions.
It is common for insurance departments to feel the need for face-to-face contact with clients. Most of the UK's top insurance firms, such as Barlow Lyde & Gilbert, Clyde & Co, Ince & Co and Reynolds Porter Chamberlain, remain firmly ensconced in EC3.
Insurance remains very much a contact business. Advisers often maintain it is essential they are within 800 yards of the Lloyd's building and many lawyers spend days at a time in the offices of clients there. Only last month, broking giant Aon opted to stay put after floating the idea of a move to Canary Wharf.
Camerons head of insurance Anthony Hobkinson explains: "Clients who get a claim on their desk and need an answer now are not going to want to get a taxi or get on the phone when they can walk across the road to our rival's office."
Of course, this is nothing new. Camerons itself was among the first of many firms in the 1990s that went through a phase of having an office in the Lloyd's building. The firm's stable of insurance clients, which includes Allianz, AIG, St. Paul and Swiss Re, does not seem to have suffered from the firm not being there.
Camerons' management justifies the cost of the relocation stating the move is proactive and part of the firm's growth plan. Presumably the pesky short-term issues of empty HQ space and rent costs are no match for the dream of fulfilling a three-year strategy.
Sullivan has gone well
Sullivan & Cromwell's London practice is a strange beast, though one undoubtedly skilled at hunting in the City jungle. Despite having for years operated essentially with niche project finance capability in the UK, the firm has steadily edged into UK M&A.
As illustrated by the firm's latest deal, which shows projects partner Craig Jones advising Philips on a decidedly domestic buyout, neither is the Wall Street legend's practice confined to quarterbacking pan-European deals that allow it to maximise its finance advantage.
The sceptics may question if European clients really know what they are buying. But Sullivan's apparent distaste for shipping in City primadonnas to extend its brand into Europe, as demonstrated by last month's recruitment of Allen & Overy's Vanessa Blackmore, is understandable given its results.
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