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Technology shaping the London insurance market in 2015

The London insurance market is under pressure to evolve; the local market needs to make the case for why global players should still send their business here, and the City must make it easier for the global insurance industry to do business with it. Change is a key theme in the London insurance market and this will continue through 2015.

Globalisation is blurring the boundaries of the old ring-fenced London market. London is traditionally a market built upon relationships and the ability to do business within a very close proximity, set aside from the rest of the world. However, in the evolving global market, the matter of how business is currently conducted in London may be considered a barrier.

London needs to learn to combine its unique selling points while embracing technology and modern systems to accommodate international markets. London market insurers and reinsurers are increasingly required to work cross-border, across different time zones, languages and currencies. Technology can increase the efficiency of business processes to deliver much simpler and faster local and cross-border deals and transactions.

Technology has already adapted to accommodate these market changes, and those insurers who have the software to allow them to operate globally hold the key to future success. The main challenge now is for the wider London insurance market to accept that it needs to adopt the right systems and not hide behind legacy to compete in the global arena.

 Some of the key technology trends we expect to see in 2015 include:

Integrated Single Platform Software

As the world becomes a smaller place, insurers planning to expand into new geographies are increasingly likely to find that legacy software systems hinder their plans. We therefore predict a rise in those insurers looking to leave their legacy systems behind or upgrade to single platform capabilities. Ultimately, newer systems will increase insurers’ capabilities to handle large volumes of data, support diverse channels to market, territories and lines of business, and ensure better risk assessment. This increases their ability to compete on a global scale.

Cloud

Cloud is another advancement growing in popularity for the commercial insurance industry and we expect it to gain more traction in 2015. Cloud offers insurers greater capacity to store, manage and process data via a remote server hosted on the internet, as well as agility to change direction and focus. It is now possible to implement software services in this form, eliminating the need to upgrade entire internal systems.

Growth in Analytics

The previous two technology trends discussed lead back to one key umbrella trend which sits above them: analytics, which we expect this to be a major area of influence and growth in the commercial insurance industry. Most companies will already have analytics in some form, but ultimately what matters is how this technology is used, to gain knowledge and insight from markets across the world, that will create a competitive advantage and the ability to compete on a global scale.

Further Process Automation

We will move more rapidly towards a common insurer back office service so that the same messaging standards that operate in London are used with non-bureau business in other centres and markets. ACORD EBOT and ECOT standards are at the heart of this initiative, which is already high on most brokers’ agendas, and we predict more carriers will follow. 

Electronic Placing

It is unbelievably 20 years since the first London Electronic Placing initiative but the London insurance market today is still very reliant on manual processes and hard-copy documentation for business transactions between the broker and underwriter. However, the environment is finally right, the base components are in place, and most importantly the drive exists to make the London market more accessible, leading to a prediction that 2015 will finally yield true progress.

Conclusion

Although the future is never certain, one thing for sure is that London’s commercial insurance market must be prepared to adapt to a changing industry or risk being left behind. By accepting and opening up to technological change, the market has the opportunity to stay ahead of the competition and firmly cement its position within the global insurance landscape.   

 

 

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