Lloyd’s of London has announced that it will reduce operating expenses by £800 million (around $1.05 billion), or about 3% of its overall costs, within the next two years by speeding up the underwriting process and increasing automation.
In a statement, Jen Rigby, Lloyd’s chief operating officer and executive sponsor of future, said that the plans would “deliver truly revolutionary change for the market, ensuring the future of the Lloyd’s market is digital from start to finish, with data at its core.”
The commercial insurance marketplace has published the next phase of its transformation plan, called Blueprint Two, which is geared at shifting the market towards a digital ecosystem.
The two-year project builds on the foundations laid by Blueprint One launched in September 2019. Lloyd’s said the first programme has allowed it to slash costs by streamlining the underwriting process.
But the pandemic has highlighted the marketplace’s need for a swift digital transition. Traditionally operating on a face-to-face basis, Lloyd’s brokers and insurers had to quickly shift to a remote model due to the government-imposed lockdowns.
“The pandemic has demonstrated that Lloyd’s can adapt in a fast-changing environment and this has only increased our hunger to get on and make further change happen,” said Lloyd’s chairman Bruce Carnegie-Brown.
According to Lloyd’s, Blueprint Two will “redesign the entire insurance lifecycle process” from placement through to accounting, payment, endorsements, claims, renewals, and reporting by increasingly relying on data and technology.
It also sets out to achieve clear data standards to support the next generation of placement platforms, and automate claims recognition, routing, and orchestration to facilitate faster claims payments.
A new marketplace gateway and quick processing capability will also be implemented for faster issuance of cover and simultaneous creation of technical accounting records.
However, Christopher Croft, CEO of London & International Insurance Brokers Association (LIIBA), said that in order for the programme to succeed, it would need support from the market.
“This is an ambitious set of proposals that could deliver a significant reduction in the cost base of London carriers – the single largest contributor to the cost of doing business here,” he said. “From a broking perspective, this can only reinforce why risks should come to London.
“But for us to be the market we all aspire to, we must ensure the enthusiastic engagement of all sectors of the market, and especially the company market.”