Insurance/reinsurance

Insurance (and reinsurance – the insurance of insurers) is an integral part of commercial activity throughout the world. The insurance practices of top-end firms advise on a range of areas, including coverage disputes, investment management, documentation, mergers and acquisitions (M&A) of insurers, and the transfer of books and business between (re)insurers. Regulatory law governs matters such as the establishment and regulation of insurance companies throughout the world. Clients include insurers, reinsurers and investors in the insurance industry, as well as major insured companies and their captive insurers.

For many, the word ‘insurance’ can conjure up images of that tedious piece of admin you have to do every year – whether that’s for your car, house, holiday or pet, for example – but Katie Power describes it as “the backbone of the world economy because it provides people with the space to take the risks they need to take in order to create the ‘magic’, as it were, in the rest of the economy”.

New York and the day to day

Despite turning up for her training contract with her heart set on a career as a litigator, it became apparent quite quickly that Katie enjoyed the transactional nature of her first two seats, which made the world of insurance M&A an attractive one. Now, as an insurance M&A lawyer at leading international law firm Debevoise & Plimpton LLP, Katie can be found “buying and selling insurance companies or other companies in the insurance space”. This involves drafting transaction documents and conducting due diligence checks of the target, for example, before “compiling information into a report to present the findings to the client”. She adds: “We look at the issues identified as part of the due diligence process and provide advice on how our client can limit those risks.”

The other side of Katie’s work is the reinsurance space. “At its most basic, ‘reinsurance’ is insurance for insurers,” Katie explains. “It’s fundamentally a risk mitigation tool” and Katie feels very lucky to work with colleagues who are at the forefront of this work. Plus, with insurance comes the need for regulation – for example, “if a client wants to make a change to certain day-to-day business arrangements”, Katie and the team are required to take a black letter law approach to identify “what the law says and then apply it to the client’s circumstances”.

Having been admitted as a solicitor in 2019, Katie looks back on her decision fondly and expresses immense gratitude for the opportunities she’s been exposed to so far at Debevoise & Plimpton. A six-month secondment to the Big Apple was one of the more recent experiences that would make it into Katie’s highlight reel. Citing the trip as one of her best moments in recent years, she explains: “It was utterly fantastic. I’d expressed an interest in going to New York after I qualified, but then the pandemic hit, which put a spanner in the works for a couple of years. However, the firm is incredibly supportive of its employees, so as soon as the chance arose again, they made sure I was given the opportunity to go. When I came back to London, I carried over a few deals – one of which was an acquisition of a public life insurance group. I had an interesting role that involved navigating that deal to closing. It was a fun period working to obtain all the regulatory approvals, talking to the clients and ensuring everyone was moving in the right direction.”

Green tech and Insurtech

With five years’ experience under her belt, Katie has seen fluctuations in both the M&A and insurance space. “On the M&A side, the end of 2022/start of 2023 was much quieter than usual for various geopolitical reasons and changes to interest rates, for example. As that started to settle slightly, we saw an uptick in M&A again.” That said, Katie describes insurance as a “counter-cyclical industry”, meaning “there are lots of things to be doing when general M&A is less busy – for example, we saw a lot of reinsurance during 2022/23”.

More recently, AI and ‘Insurtech’ have been on Katie’s radar. “The EU AI Act has got some really interesting implications for underwriting business using AI and it’ll be interesting to see how the UK regulators approach the use of AI.” In terms of ‘Insurtech’ – a combination of ‘insurance’ and ‘technology’, and an evolving area – Katie references natural catastrophes as an example of where Insurtech is being utilised to transform the way insurance work is undertaken. “Insurers are using drones to fly over the area where there’s been a catastrophe, so they can take images to get an idea of what needs to be paid out. The use of drones helps to speed up the process, so insurers can pay their customers more quickly,” she explains.

Alongside investment in AI, there’s also an increasing amount of investment in green technology – an area that Katie is particularly interested in. Conversations around green technology spark a discussion on climate change – a widespread global issue, with the insurance space unable to avoid the impact. “If you write property insurance in Florida where there’s an increased risk from hurricanes, there’s a knock-on effect on the underwriting side that must be considered. The UK regulators have been taking this into account.” Katie adds: “On the other side, insurers are some of the world’s biggest investors – they’re investing in companies and infrastructure projects, for example. We already know that participants in the investment space are talking about the impact of environmental, social and governance (ESG) on that side of the business.”

It's these issues and developments, plus geopolitical instability and cyber risks, that make the insurance industry such an interesting one to operate within – “it’s an area that responds to what’s going on in society”.

“It’s not like Suits”

As well as common misconceptions about the insurance industry, Katie aims to debunk one of the frequent myths about the legal profession too: “It’s not like Suits.” To back this up, she adds: “My sister works in a hospital and says, ‘comparing the legal profession to Suits is like turning up to the hospital and thinking Grey’s Anatomy is real’.”

This is where she highlights the value behind research – and Katie doesn’t just mean checking out a firm’s glossy website, she urges aspiring lawyers to talk to people about their genuine experience day to day. “That’s why I think websites like LawCareers.Net are fantastic because they talk to lawyers about what they actually do to provide insights to the next generation of trainees. There’s also so much value in attending law fairs and preparing yourself to talk to firm representatives there. When someone says, ‘my firm is really collegial’, you can ask them what that means to them and what this looks like at the firm.” Finding a firm that suits your career goals and personality is key – this doesn’t mean following in the footsteps of your peers, it’s about understanding that “what works for you, might not work for someone else”. Katie has friends who work at magic circle law firms and who were part of big trainee intakes – a characteristic that didn’t appeal to her but was perfect for her friends. “At Debevoise & Plimpton, we recruit 10 trainees a year and the size of the trainee intake was a big pull for me. I loved my training and my friends who trained at a magic circle firm loved their experience too.”

Putting aside the preconceived image of what you think a career in the legal industry looks like is crucial to enabling yourself the headspace to make a decision about a law firm that suits you, your interests and career goals. The same can be said for the various practice areas because, despite what might initially come to mind when you think ‘insurance’, it’s so much more than the tedious admin you have to do every year, as Katie has quite clearly shown.