Lloyd’s of London has unveiled a blueprint for action to facilitate its Future at Lloyd’s project, which aims to “build the most advanced insurance marketplace in the world.”
This first blueprint, called “Blueprint One,” sets out six ideas of improved ways of working, with a focus on digital, data and technology to deliver greater benefits to customers. It will be updated, at least, on an annual basis.
Lloyd’s said Phase I of the blueprint will be delivered during 2020 and will include early quick wins, including the launch of the electronic risk exchange which could, over time, process as much as 40 percent of Lloyd’s risks. In addition, Lloyd’s will pilot a solution that automatically triages claims to speed up settlement and introduce simplified onboarding for Lloyd’s coverholders.
Lloyd’s stepped up its ongoing effort to build a more efficient, simpler and less costly marketplace when it published its Future at Lloyd’s prospectus in May. After a 10-week consultation period to gather ideas for market improvements, the blueprint for those changes is being unveiled today.
Here are the six integrated solutions Lloyd’s announced it is developing over the next year:
- Complex risk platform. A digital, end-to-end platform that complements face-to-face negotiation to submit, quote, bind, issue, endorse and renew complex risks for insurance and reinsurance business. (Lloyd’s initially will invest in the next generation of the London market’s existing electronic placing platform, PPL, building its capability over time.)
- Lloyd’s risk exchange. An exchange for underwriting relatively non-complex, high-volume, low-value risks, which enables policies to be created and bought digitally. This digital exchange connects to existing systems or provides a new user interface, enabling instant search, quote, bind and issue to improve the speed of placement and customer experience.
- Claims solution. A solution designed to transforms the claims process by automating simple claims, using straight-through processing, resolving standard claims handling on behalf of the market and empowering lead underwriters to handle the most complex claims. This solution will create a better customer experience, making it easier to track claims and speed payments.
- Capital solution. A solution that offers alternative capital providers more options to attach risk more flexibly, for the benefit of all market participants, supported by a new capital platform. It is designed to make the market more attractive and accessible to all traditional and new forms of capital (including financial investors) while maintaining strong underwriting discipline.
- Syndicate in a box. The blueprint described this project as a new way “to bring innovative, accretive and profitable business into the market for a set period without the need for a physical presence in Lloyd’s…”
- Services hub. A set of high-quality, value-add services to support the market’s business, including access to Lloyd’s data, insights and analytics, business support functions, and product innovation accelerators. All these resources will be access via an online portal.
The Future at Lloyd’s project builds on an earlier modernization project, the London Market Target Operating Model (LM TOM), which includes the London market’s electronic placement platform, PPL. The LM TOM is now being wound down, supplanted by the Lloyd’s Blueprint for the Future at Lloyd’s, although the Blueprint is building on PPL’s capabilities.
Lloyd’s also announced that Munich Re will launch the first new “Syndicate-in-a-Box” through its Lloyd’s vehicle Munich Re Syndicate Limited. The new Munich Re Innovation Syndicate will begin underwriting on Jan. 1, 2020 with no physical presence in Lloyd’s. It will underwrite a range of innovative lines of business such as renewable energy and parametric insurance for weather risks.
“The extensive feedback we have received in progressing the blueprint has confirmed the preeminent place Lloyd’s holds globally in insurance and reinsurance. The plans unveiled today create execution certainty through phased delivery,” said John Neal, Lloyd’s CEO, in a statement to announce Blueprint One.
“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.”
Lloyd’s said it is focused on leadership across three key fronts:
- Improving the market’s performance.
- Delivering the Future at Lloyd’s strategy.
- Tackling unacceptable behavior in the Lloyd’s market with robust actions to build a diverse and inclusive market in which everyone is respected and valued. (Lloyd’s this month detailed a plan to address the toxic culture of harassment, which women in a survey revealed is prevalent in the market.)
For six months, starting Oct. 1, Lloyd’s will begin a planning phase to develop its blueprint “to ensure we are ready to execute the plan,” said Lloyd’s.
London Market Comments
- London Market Group. “This blueprint process has demonstrated tremendous cross-market collaboration in its creation, and we are delighted that the LMG Board will become the London advisory body for the Future at Lloyd’s – representing as it does the widest possible market representation across all stakeholders in the market and across the re/insurance value chain,” said Clare Lebecq at the London Market Group (LMG).
- London & International Insurance Brokers’ Association (LIIBA). “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,” said Chris Croft from LIIBA.
“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,” he added. “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.”
“PPL has built a significant brand and following because it works for all parts of the community. The fact we can develop something so important together has been a valuable lesson. The announcement that PPL will form the basis for the complex risk platform and will receive investment in improving it further is great news for the market,” Croft affirmed.
- Placing Platform Ltd. “PPL has become the platform of choice for the London market. The critical mass that the market has built is invaluable, and it is entirely logical that Lloyd’s should use it as the basis for its complex risk platform,” said Bronek Masojada from PPL. “One of our priorities has been to improve the user experience and build a new platform. Lloyd’s support will accelerate that process and is warmly welcomed,” Masojada added. “The platform’s success is dependent on all segments of the market collaborating to make it work – this is the spirit that makes change happen in Lloyd’s and the London market.”
- The Lloyd’s Market Association (LMA). “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. It is absolutely right that this is the primary focus of the Future at Lloyd’s, which is why it has the broad support of the LMA and the wider market,” said LMA CEO Sheila Cameron. “I am reassured that many of the comments and questions posed in our response to Lloyd’s have been addressed or acknowledged in Blueprint One,” she added. “We look forward to seeing more detailed development of the six integrated solutions that will form the future Lloyd’s ecosystem and help to shape the development of some of the supporting strands such as modern risk syndication.
*This story ran previously in our sister publication Insurance Journal.