Beale: Everything is interconnected in the whole world now, like never before. And this gives insurers a bit of a challenge. For instance, if a hurricane came in, we knew it would hit this certain geographic area. But the interconnected world, with everything being intangible, this gives us a real, real challenge. By the end of the first quarter next year, we will release some cyber scenarios that we think are realistic. We are getting experts together and looking at potential scenarios across the globe, given all that interconnectivity—what insurance coverages can be given, what roles insurance will play, and come up with realistic disaster scenarios and estimate dollar amounts to them.

Hillebrand: Did the City Risk Index identify any emerging markets?

Beale: What is interesting, say if it was somewhere in China, some of the cities we identified people haven't even heard of, and these cities have bigger GDPs than the whole of Sweden, for example. It's staggering. The reason we came out with the City Risk Index is to alert people, get them thinking, and realize that this world really is changing. And whereas a lot of the analysis done by, for instance, the World Economic Forum groups, highlight a lot of the emerging risks—but no one has put numbers on some of the risks like we have done.

Hillebrand: What emerging risks is Lloyd's looking at right now?

Beale: So the cyber piece is the one we talk about quite a bit a lot, and we also are looking at the whole area of drones. We are looking at the supply chain, although supply chain insurance has been around for a long time. But what is happening is the supply chain is so interconnected across the whole world, so we want to help businesses calculate what could be the breaks—what could snap in their supply chain and cause a loss. We are looking at reputation and how you can limit reputation damage. You can look at the Volkswagen issues for a start, and how that news gets across the world in seconds.

 Attendees at the "Meet the Market" event in San Francisco (Photo provided by Lloyd's of London) 

Hillebrand: What are you seeing, in the corporate assessment of cyber risks outside the U.S.? You mentioned that the majority of Cyber policies written by Lloyd's affiliates are for U.S. clients. 

Beale: What's interesting to me is, why is it that U.S. businesses are buying and practically nobody else? I think it's because of the regulatory environment. The regulators are saying, "You have to report this information, you have to take necessary action if something has happened." That approach hasn't happened elsewhere in the world. In Europe, we would like that same approach. Right now, businesses are forced to put cyber on the board agenda and you move away from this concept if the head of IT doesn't want to admit that anything might be at risk in the firm. So they don't want to volunteer that cyber issues are a risk. But if you force through regulation that every hack has to be reported, suddenly it gets on the board agenda. And then it's OK for the IT manager to admit that this could happen and that could happen.

Hillebrand: What can you tell us about Lloyd's modernization initiative?

Beale: We have a paper-based process. We are a physical trading floor, we have brokers coming in with the risks on actual pieces of paper that get stamped and signed. And they are photocopied. And because we run a subscription market, you might have 10 or 15 underwriters on that same risk, so it's photocopied 10 or 15 times and it's entered 10 or 15 times. So just by that, you can see that it's not as efficient as it could be. So what we wanted to do was get the data electronically to the underwriters' system at the push of a button.

Hillebrand: Do you think there is a way to make changes like that to traditional processes, while still keeping the spirit of Lloyd's?

Beale: Yes, and that's the idea. We were not about taking away that negotiation, because that is so important. But it's just about transferring the data. So instead of the underwriter taking a photocopy of a piece of paper and handing it off to somebody to input it, he presses a button and it goes into the system. And also we want to work on the claims processes. I look at how woefully we are behind in some sectors, if you order something from Amazon, you get text messaged, the product is delivered to your door. We need that for our policyholders. What we want to do is be much more responsive. We need new technology or we are going to be left behind and potentially be "Uber-ized" ourselves. Someone else will come in and say "Why on earth do you do it like that?" We have to think about banking. I can remember the days of sending a check and someday that money will leave our account and go into someone else's. Nowadays, it happens immediately, you are in control of it. So even the banking world has moved on far, far faster than the insurance world.

Hillebrand: What can you tell us about Lloyd's global expansion plans?

Beale: This is really driven by the fact that the economic power by 2030 will be in the hands of a different set of nations. And that power is going to shift from the traditional west to these new economies. Growth and the future is going to come from new economies. So we are going after places like Brazil, Mexico, Columbia, looking at what we can do and how we can bring the Lloyd's specialism to economies that are going to be needing insurance. They are going to be getting more and more sophisticated, they are going to have big complex risks, and we want to be able to go after markets like that. Same in Asia, with China, Malyasia, Indonesia and now also Africa. Not South Africa—that has always been a big market for Lloyd's, but some of those other sub-Saharan countries.

Hilebrand: What opportunities do you see in those countries?

Beale: Lots of energy, business and infrastructure development. You have the growing middle class, people buying insurance for the very first time. And they are not going to want any paper. Everything they do is mobile technology. They don't even have bank telling machines, they don't take cash out, they transfer everything with their phones and mobile devices. So if we don't modernize ourselves, we can't even think of competing in some of these emerging markets.

Hillebrand: You started off as an underwriter, and now you are the CEO of Lloyd's of London. What have you learned that you can teach other women about pursuing a career in insurance?

Beale: When I was at St. Joseph's University [in Philadelphia] and I saw how many women in the student group were studying risk management and insurance, it was still heavily biased toward men. Today, fewer than 1% of female graduates want to go into insurance, it ranks below banking. So there is something about insurance that is not appealing to them. Yet we do such a valuable service for societies, for business, governments and countries, and we don't sell it enough. But it's a fascinating business and behind almost every headline around the world. And we do such good things for society, but we don't tell our story well enough, so we really need to get out there and talk about it more, to appeal to people to come in.

Hillebrand: What have you learned at Lloyd's about what it means to be a leader, and encouraging other women to be leaders?

Beale: We have launched Inclusions@Lloyds, which is about getting people to understand how beneficial it is to have diversity and diverse thought, that you don't have the same homogenous people around the table, because that won't drive modernization or innovation. We have a charter that we put out, and we have asked people to sign up—the syndicates and brokers—to commit to supporting diversity and inclusion, and encouraging them.

We want to be sure we reflect our customer base. Everybody wants to deal with people that they can somehow relate to. Ninety percent of people working in the Lloyd's market are British, yet only 15% of the business we write is for the U.K. We need to reflect more of the business we write. No longer can we issue policies in English. If we are dealing with somebody in Spain, they want a Spanish language policy, and we need people to speak the language. That is what is changing for Lloyd's. If you think about the markets where we have been so strong, English is the language.