It’s all systems go for Lloyd’s of London’s transformation plan, the first phase of which will begin next month.
“We are now ready to start building the Future at Lloyd’s, having achieved three major objectives – securing finance, setting the governance structure, and detailing the plan for the next 12 months and beyond,” said Lloyd’s chief executive John Neal when the centuries-old insurance marketplace released Blueprint One: Update, which outlines what’s been achieved so far, 2020 priorities for Lloyd’s, and Phase 1 execution plans.
Neal stated: “I am excited about the opportunities The Future at Lloyd’s offers to our market, and grateful for its support as we move the ideas from strategy into reality.”
It’s been announced that the Lloyd’s Corporation is taking a 40% stake in Placing Platform Limited (PPL), which will be crucial in the creation of a complex risk exchange, the first pilot of which will be trialled this year.
Commenting on the development, PPL board chair and Hiscox CEO Bronek Masojada asserted: “The investment by Lloyd’s is a tangible demonstration of their commitment to building on the success that PPL has achieved so far.
“With over 70% of risks now being bound electronically, we clearly have critical mass, and this investment will be used to enhance and industrialize the platform we have today as well as building the next generation of PPL.”
Simon Matson, chief executive of Gallagher’s UK broking and underwriting business, pointed to the significance of making electronic placement the norm across the London market.
“In the last month alone at Gallagher we processed 80% of London market risks electronically, and a key focus for us is how we can work with underwriters to minimize turnaround time on quotes to maximize productivity even further,” noted Matson.
“However, we cannot overlook the importance of human discussion and specialist expert counsel which is vital for the complex risks underwritten at Lloyd’s and as such relationships between customers, brokers, and underwriters remain the backbone of the London insurance market.”
The CEO is also pleased with the re-emphasis of the modernization programme’s scope, as he believes it will ensure that efforts are focused on cost savings and an enhanced client experience.
“Dealing with a claim efficiently and getting the client back to the position they were before an incident or event is ultimately the moment of truth for any insurance policy,” stressed Matson, “so anything that can be done in this space will have a big impact and reinforce the value of what we do as the client advocate.”
According to Lloyd’s, it will prioritize three foundational initiatives this year aimed at creating the essential infrastructure and laying the groundwork for the Future at Lloyd’s ecosystem. These are data and technology architecture, modern syndication of risk, as well as middle- and back-office transformation.
Welcome news but…
One trade body, meanwhile, has expressed reservations.
Offering insights, London & International Insurance Brokers’ Association (LIIBA) chief executive Christopher Croft had this to say: “LIIBA welcomes the ‘fundamentals first’ approach that Lloyd’s is taking with Blueprint 1A, and a focus on the bread-and-butter basics of business in the market. But there is an absolutely foundational area where we worry not enough attention is being paid: the accounting and settlement process.
“Undoubtedly it lacks the glamour, but resolving the complexity that currently surrounds it is vital. Brokers are still asked to do too much on behalf of insurers – significantly more than in any other insurance centre – very little of which is visible.”
Lloyd’s, however, did say that it is committed to prioritizing delivery of solutions that offer the most benefit and drive tangible value. Among these are accelerated process improvements to claims, including piloting automated settlement.
“Future at Lloyd’s has the opportunity to revive spirits in this area and reap considerable reward both in terms of benefit delivery and reputation for all participants,” added Croft.