00:00I'm sure this has kind of been dominating a lot of the thought of you and the team over at
00:04Marsh.
00:05How are you seeing this current situation evolve in SHIP's willingness?
00:08What does it take? Is it insurance or is it just literally can I traverse through the straight and not
00:15be hit?
00:16Well, thanks, Danny. It's nice to see you.
00:18First and foremost, we have a big business there.
00:20We have 2,500 colleagues and a lot of clients, many, many clients to support.
00:24And so, you know, that's been our focus over the 55 days or so of this of this conflict.
00:30As it relates to shipping, yes, for the most part, ship owners are not ready to send their teams of
00:37people into the straight.
00:38So insurance is not a gating issue at the moment.
00:42It's de-escalation of the conflict.
00:44Of course, there's a much broader economic consequence to all of this.
00:48But the market will be ready to respond.
00:51The few ships that have traveled through, of course, are paying much elevated rates from more normal times.
00:57How is that actually structured?
00:58And then how does Marsh play into the ecosystem?
01:01Well, we're a risk advisor.
01:02So our clients are the ship owners.
01:04And so, you know, we work with the ship owners to help them not just through the Strait of Hormuz,
01:10but, of course, through seas all over the world and not just, you know, blue ocean shipping, but all types
01:16of shipping.
01:16And so we're helping them and we collect data and study the risks and share those risks with our clients
01:23and then help them make decisions.
01:24And if they choose to buy insurance, which if you're normally navigating through a risky area like that, of course,
01:30insurance is an important part of that ecosystem.
01:32So if the conflict does come to a resolution, how quickly can one the flow and prices normalize?
01:37Or do you think just knowing that this threat exists, that this can happen, where Iran has the ability to
01:43control the flow through the Strait of Hormuz, just necessarily commands higher insurance prices?
01:47Well, look, I think it's likely as things de-escalate, when it de-escalates, you know, that you'll have a
01:53heightened period of risk for a period of time.
01:56But if then things normalize, you know, I would expect relatively quickly. The private markets will be there. Of course,
02:02the U.S. is talking about allocating some capital
02:05to support shipping in the Gulf, which we welcome for our clients. Other governments are talking about that as well,
02:11other parts of the world.
02:12But I would expect that the market would normalize as tensions come down. Of course, there's mines, you know, throughout
02:20the Gulf.
02:20All those things, you know, need to be need to be dealt with. But it'll take a period of time,
02:24but that'll settle relatively quickly.
02:26I say, John, it's a fascinating time for you and your business right now, because you kind of sit at
02:30the intersection of all of these huge disruption fears.
02:34It is both war and both AI that have an impact on your business. For AI, I mean, are you
02:40frustrated as a CEO at all?
02:41Because it does feel like your share prices have kind of been bullied around by just headline fears and what
02:46the disruption of technology will bring.
02:48It can be frustrating, but, you know, we had a great conversation a couple of weeks ago when we reported
02:52our first quarter results around why we thought we'd be an AI winner.
02:56We have deep, longstanding, valued client relationships. We have proprietary data, deep insights, data modeling.
03:04We connect to a very complex ecosystem of risk financing. When we had that conversation with our investors, I think
03:11they began to see why, of course, we need to execute, but why we will be a winner over time.
03:17We've faced competition for all 155 years of our history, and, you know, this period will be no different.
03:22But so, you know, we're excited about what AI can do for our business and what kind of value it
03:28can deliver for our clients.
03:30Does it change margins at all, though? Does it flow back to the insurers away from the brokers?
03:35Ultimately, no, absolutely not. I think we get paid, you know, what we get paid is a reflection of the
03:41value that we create for our clients.
03:45Insurers, of course, are an important part of our ecosystem and provide important risk financing to our clients.
03:52But we also connect, we're the largest manager of captive insurers in the world.
03:58We connect to capital markets for risk financing. And so, no, absolutely not.
04:04Our client, we're very transparent about how we get paid.
04:06And, again, I think we have the opportunity to create even more value for our clients using AI.
04:11What about the insurance of AI risks itself?
04:14There has been reporting that there seems to be some hesitation or unwillingness to ensure some of the more, like,
04:20frontier AI risks.
04:22How does that market look?
04:24Well, you know, it's evolving, of course, as these models come to market and new risks emerge from the new
04:30economy that, you know, that will develop over time.
04:33And so, again, whether it's the dot-com era, more recently with blockchain, other technology innovations, we as an industry
04:41study these risks, reflect on them, talk to clients.
04:45Clients can't attract capital without having a risk management plan in place.
04:50And so, we're an important backbone to the economy. And this, you know, these evolutions are no different in that
04:57respect.
04:58They're different issues and different risks. And cyber, really, I would say, you know, is at the top of the
05:03list of concerns that I have about what AI can mean.
05:07Now, it's also going to help with cyber defense, but we have to make sure that our clients and governments
05:14have their eyes wide open around these risks and have plans in place to mitigate risk.
05:20I mean, like, how would you even ensure against a risk that, like, mythos gets in the wrong hands and
05:24some bad actor can find zero-day vulnerabilities within seconds?
05:28How do you even think about structuring something around that?
05:31Yeah, you know, and again, we rely on data from the past. We'll study the new models as they come
05:36to market.
05:36And, of course, you know, Anthropic, in this case, is being very thoughtful and trying to share that model with
05:42government and with private enterprise to get a sense and feel for how those new risks might emerge.
05:49The insurance market's studying it as well and trying to get, you know, an understanding of how that could shift,
05:55you know, risk issues.
05:57And for our own business, our chief information security officer is deep in study to, you know, to help understand
06:04and make sure that we're protecting our environment as well.
06:06Right. By the way, for, you know, insurance brokers, kind of known as, like, a state industry, but you're doing
06:11some, like, pretty flashy, exciting stuff.
06:13You got an F1 partnership.
06:14We did. We're very excited. We announced it yesterday. I'm going to Miami for my first race ever.
06:19A few months ago, we announced that we're going to migrate from a house of brands to a branded house.
06:24And Marsh, you know, as our new brand, we're very excited about this. It's a big investment for us.
06:29We love the F1 brand. It's globality. It's fan base. Not only is it enormous and growing, but it has
06:36key decision makers as part of it from all over the world.
06:39And so we're very, very excited to partner with them going forward.
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