Lloyd’s of London has shown its hand to the world. Today, the world’s longest-standing insurance and reinsurance marketplace, has published Blueprint One – a document that lays out how Lloyd’s plans to build what it describes as “the most advanced marketplace in the world”.
The first blueprint follows the unveiling of the Future at Lloyd’s prospectus on May 01, 2019, and contains six initiatives that will be rolled out for customers and market participants during 2020. The six integrated solutions include: a complex risk platform (a next-generation PPL), the Lloyd’s risk exchange, a claims solution, a capital solution, a brand-new syndicate-in-a-box solution, and a services hub.
All of these Phase 1 ideas revolve around improved ways of working, with a heightened focus on digital, data and technology to deliver greater benefits to customers.
Phase 1 of the Lloyd’s transformation will include the launch of an electronic risk exchange which could, over time, process as much as 40% of Lloyd’s risks. Customers and market participants should expect to see this introduced in 2020. The market will also pilot a solution that automatically triages claims to speed up settlement and introduce simplified onboarding for Lloyd’s coverholders.
The upcoming syndicate-in-a-box solution is a first for the Lloyd’s market. It will be launched via Munich Re Syndicate Limited, and will begin underwriting on January 01, 2020, with no physical presence in Lloyd’s. The off-site syndicate is set to underwrite a range of innovative lines of business such as renewable energy and parametric insurance for weather risks.
Followig the completion of phase 1, Lloyd’s will work methodologically towards the ambition set out in the Future at Lloyd’s prospectus. The market aims to achieve this via “strong transition and execution planning, followed by a series of phased deliveries”.
“The extensive feedback we have received in progressing the blueprint has confirmed the preeminent place Lloyd’s holds globally in insurance and reinsurance,” said Lloyd’s CEO John Neal. “The plans unveiled today create execution certainty through phased delivery. The support we have enjoyed to date has been essential to delivering Blueprint One and we are seeking the renewed commitment of all market participants to partner with us to achieve our vision to build the most advanced insurance marketplace in the world.”
Blueprint One has been welcomed at large by the insurance industry. Clare Lebecq, CEO of the London Market Group, said the Blueprint process demonstrated “tremendous cross-market collaboration in its creation”. Likewise, Sheila Cameron, CEO of the Lloyd’s Market Association (LMA), commented on the “broad support” for the blueprint. She said: “Lloyd’s ambition to be the most advanced insurance marketplace in the world is achievable, but will be thoroughly dependent on our ability to innovate and evolve our model so that we may continue to offer outstanding underwriting products and services to our customers.”
Support has also been voiced by the broking community. Christopher Croft, CEO of LIIBA, said: “The broking community welcomes the fact that the development of the blueprint for the Future at Lloyd’s has been a positive and discursive process. For any market development, the distribution arm is at the front end of the process, getting that part right is critical to whatever Lloyd’s develops, as is ensuring any solutions developed work equally efficiently for non-Lloyd’s carriers given the global nature of our market. LIIBA members have worked assiduously in recent years to shorten the value chain that brings business to London and therefore to reduce cost and complexity significantly. Technology has a role to play in helping us reduce that further but not at the expense of the value that an intermediary brings to the process.”
The blueprint for change has the potential to help safeguard Lloyd’s as London faces up to challenging times ahead, according to Jennette Newman, president of London FOIL, and partner at Clyde & Co. She added: “The ambition and scope of change are impressive, but it’s crunch time now as we move from words to actions. The structural changes are substantial and not all businesses will benefit – maintaining a sense of progress will be critical if the blueprint is to deliver.”