Christopher Carney

Christopher Carney

Director Consulting Expert

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Blueprint 2 sets out the primary goals for the Future at Lloyd’s transformation programme to be delivered over the next two years. This iteration of Lloyd’s vision is much more inclusive, enshrining in the design principals a desire to move forward in partnership with the London market and the global insurance community.

This more collaborative mindset is evidenced by Lloyd’s decision to invest in Placement Platform Limited and lend their support to the next evolution of the London Market’s preferred placing platform. The new “document plus data” platform is an important intermediate step towards a truly ‘data first’ platform, and lays important foundations for the London market of the future.

Why the focus on placement data?

Capturing and sharing data early in the placement process unlocks important efficiencies and enables new downstream capabilities. Below I will explore some of the benefits that arise from this approach:

  1. Faster, improved risk assessment

Digitised submissions with accompanying data payloads can be ingested by underwriting platforms for fast pre-qualification of risks. Underwriting organisations may choose to augment the data provided by the broker from their own sources and/or combine that with data provided by Lloyd’s Placement Support Services to refine their view of the risk, whilst only requiring the minimum of data from the broker.

We have seen similar approaches in the general insurance market where CGI’s Insurance Market Manager helps insurers optimise their risk selection by intelligent triaging of opportunities against appetite and eliminating unnecessary data augmentation costs.

By leveraging digital submissions, brokers will be able to canvass the market and obtain expressions of interest far faster than before, improving speed of response and pricing certainty and transparency.  However, to achieve this goal the market must agree and implement both data standards and clear, unambiguous responsibilities for data quality.

  1. Fast capacity

In May 2020, Brit launched Ki, the first fully digital and algorithmically-driven Lloyd’s syndicate.  Congratulations are in order to Ki for announcing that they have bound their first risk, however, initial access to Ki capacity is via a proprietary portal, not an ideal situation.  Digital submissions will eventually enable Ki to be approached on market placement platforms alongside more traditional capacity, but with the benefit of automated responses 24/7.

Fast follow, digitally accelerated capacity is surely the template for others in the future, and I expect to see this approach increasingly common as the technology and benefits mature. I believe machine learning techniques will bring significant benefits to risk selection and pricing, however, the models used must be capable of audit against bias, something the FCA wrote about in October 2019 and I discussed in the recent London Market Forums Technology & Innovation Summit.

Digital Closing & Premium Payment

The London market navigated the complexities of contract certainty in the middle of the last decade; however, some issues remain unresolved.  There are often significant delays between an underwriter writing a line and being advised of their final signed line and technical accounting. The impact of this is inefficient use of capital, as exposures remain unquantified, and premium and tax obligations unresolved for extended periods. Blueprint 2 describes an ambition to create technical accounting ledger entries at the point of bind. This will be a major step forward for the market but will only happen when the placement record contains the necessary risk and fiduciary data at the point of bind.

This ambition will not be easy to deliver, and there are many details (signing down methodologies, tax calculations, etc.) to be agreed with all stakeholders.  This is a journey CGI understands better than anyone.  Over the last 50 years, CGI has helped accelerate digital payments innovation, starting with designing SWIFT in 1969 and today central markets, international banks and corporations around the world rely on CGI payments technologies.

The potential upsides for the London market in adopting new payment technologies are significant.

  1. Faster Claims Handling

Processing claims efficiently, providing fast confirmation of cover & proceeding swiftly to settlement are key deliverables for Blueprint 2.  Lloyd’s reiterate their intention to provide an eFNOL service to promote the efficient handling of claims.

The advancement of the Lloyd’s claims proposition relies heavily on data captured during the placement process.  Without a digital representation of the risk, signed lines and premium payment status available at the first notification of loss, it would be impossible to confirm cover and route claims effectively.  Early capture and sharing of data provides the means of delivering this improved proposition.

A change of focus

In a world where data and algorithms are increasingly used to disrupt established industries, Blueprint 2 sends a clear message that it is time for the London market to embrace its digital future to deliver a market fit for the 21st century.  Some organisations will be better placed to adapt, and take advantage of the opportunities that will present themselves, whilst others will struggle to keep up and remain relevant.

If your organisation would like to explore how we can help you on your journey then please contact me to find out more about CGI in Banking and Insurance.

About this author

Christopher Carney

Christopher Carney

Director Consulting Expert

Christopher has extensive experience as a senior Operations Director in the London and UK General Insurance markets.