The Future at Lloyd’s Initiative – What It Means for the London Insurance Market | Blog
Lloyd’s of London, as part of its Future at Lloyd’s initiative, released Blueprint Two in November 2020 as a follow-up to its initial strategy of advancing the London market’s efficiency and enhancing stakeholder experience. The initiative clearly outlines the changes to be implemented over the next two years to realize the vision set out in Blueprint One, which was released in September 2019 and which listed the different components that would make up Lloyd’s ecosystem: primarily, a complex risk platform with data-first capabilities; Lloyd’s risk exchange to process relatively non-complex, high-volume, low-value risks; a claims solution to automate simple claims; and a new syndicate-in-a-box concept to encourage innovative and accretive business and talent at Lloyd’s.
Understanding Blueprint Two
Apart from its intent as outlined above, Blueprint Two addresses Lloyd’s market participants’ concerns about the inefficiencies caused by disjointed processes and technologies used in risk placement and claims handling by transforming the processes into a seamless end-to-end experience.
Blueprint Two focuses on two core placement types – the open market and the delegated authority business – which together account for more than 90% of the insurance contracts placed at Lloyd’s. The blueprint keeps the customer at its heart, simplifies the complexity of doing business, accelerates the data value realization process, and fosters trust through open communication and transparency.
Lloyd’s plans to achieve consolidated savings of GBP800 million by adopting digital technologies that enable automation, virtual collaboration, digital contract management, automated data ingestion, electronic First Notice of Loss (eFNOL), intelligent workflow management, and third-party integration. Lloyd’s will spend an estimated GBP200 million over the next two years to support future initiatives and realize the goals laid out in Blueprint Two. As the pandemic has expedited the need to move to a new digital environment, Lloyd’s aims to move its marketplace operations from a predominantly document-based model to a document-plus-data model, ultimately reaching a data-first operating model.
What the transformation offers and what it means for the market
For technology and service providers in the London market, the transformation program presents a host of opportunities to advance their market standing by providing:
- A virtual collaboration environment: The push to move the interactions between brokers and underwriters toward a more digital environment has created the need for a digital workplace and collaboration solutions
- Integration with third-party systems: As the marketplace evolves further, it will offer a choice of different risk-placing platforms (such as PPL) and the need for Application Programming Interfaces (APIs) to integrate them to enable seamless data exchange
- Ancillary or value-added services: To enable this transition, there will be a need for greater risk and regulatory compliance, tax calculation, and fraud and claims investigation services
- Digital processing capabilities: The future digital marketplace will need solutions to reconcile transactions/contracts and maintain a single ledger as a source of truth for all the parties involved
- Intelligent workflow management: To automate claims data ingestion, validation, and dynamic routing, an eFNOL portal will be connected to the claims solution. Doing so will drive the adoption of workflow automation and rules-based decisioning for claim-policy matching, claims adjudication, and faster automated payments
- Platform/solution development: The need to facilitate collaboration between managing agents and coverholders will drive the development of custom solutions, which will help in coverholder onboarding, data flow management, risk placement, and contract management between the parties involved
What will it take for Lloyd’s to transform?
As Lloyd’s looks at pioneering specialty risks coverage and introducing new syndicates as part of its transformation program, it needs to be mindful about how to proceed with talent acquisition and data strategy.
Coverage for newer specialty risks demands a revamped data strategy to combine data from non-traditional sources, mitigate data privacy risks, improve data accessibility for relevant stakeholders, and run analytics to enable innovative risk pricing. At the same time, dedicated effort is needed to acquire talent with relevant technology skills (such as APIs, microservices, and advanced analytics) and expertise in handling complex specialty risks, such as the protection of commercial spacecrafts, satellites or intangible risks such as the voice of a singer.
While Lloyd’s of London aims to expand its market operations globally, its market participants will also need to ramp up their enterprise software capabilities to avoid being too Lloyd’s-centric, which means enabling technology transformation of the wider London insurance market and not only for its market participants.
For technology service providers operating in the London market, this initiative represents an opportunity to develop modern software platforms built with flexibility in mind. Service providers can achieve these benefits by leveraging an ecosystem of specialist technology vendors and insurtechs, and focusing on enhanced virtual collaboration, data and security, intuitive customer experience design, cloud-native architecture, and artificial intelligence.
If you’d like to learn more about the recent developments at Lloyd’s of London and their impact, please reach out to us directly at [email protected] or [email protected].
