In September 2019, the world’s oldest insurance marketplace made yet another announcement about how it would transform itself for the future.
The announcement of the
Lloyd’s Blueprint One had been well signalled when Lloyd’s announced the Future of Lloyd’s Prospectus back in May. This was followed by a consultation exercise that wrapped up in July.
To give me some perspective on all of this, I touched base with my colleague, Ian Gibbard.
Given that Lloyd’s has proclaimed new bold modernisation programmes before, like the recently retired London Target Operating Model, some might regard these new plans with some cynicism. That is probably unfair reckons Ian. He says we all should recognise
that the market has huge strengths but, equally, it does need reform of its systems, processes and culture, and Blueprint One is the only plan on the table today.
There is strongly expressed ambition in the document to make the market break with tradition and embrace the digital age fully. Indeed, the goal of Blueprint One is to transform Lloyd’s into the most advanced marketplace in the world. This is articulated
as becoming “the global marketplace to buy and sell insurance, offering a one-stop shop of high-quality, cost-efficient products and services to cover even the most complex risk needs.”
The key elements of this plan are for 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.
What is welcome about Blueprint is how these changes and migration to digitisation are motivated by a determination to deliver improved customer services as well as operational efficiencies. Every process, IT, or regulatory project, and pound spent, needs
to be focused on these two goals.
So, a great deal to applaud about Blueprint One, but as Ian and other experts point out, the devil is in the detail of how the digital market reforms will happen.
Independent commentators like
Oxbow Partners have noted that Lloyd’s determination is to control the new technology, and the extent to which Lloyd’s wants to use technology to be a differentiator or a platform for doing business well. The ability to differentiate might suit traditional
technology interests in the London market who say the market is unique and therefore requires specialist technology solutions. As Oxbow suggest, this path would see Lloyd’s develop its own digital technology to set itself apart and ahead of other complex insurance
marketplaces. Is systems development where Lloyd’s should be focussing its resources and management bandwidth?
While there are unique processes like write-back that need to be accommodated, it could be argued that making Blueprint One a reality in the timescale planned would be better served by Lloyd’s implementing new platforms that take best of breed solutions
and adapt them to the market’s requirements. Lloyd’s could cherry-pick the proven digital modern solutions for risk, policymaking, and claims management that have been developed for, and used successfully by the rest of the insurance industry over the last
ten or more years.
Blueprint One will succeed not just through making the right technology choices, but also through how a digital-first culture begins to develop within the market. Past technology reforms have failed because they have not been followed through wholeheartedly.
The new plan has culture and people as one of its six “foundation solutions” alongside the more obvious data and technology. Lloyd’s is passionate about creating a marketplace of high-performing people with a diverse range of skills and experiences. This must
include digital skills and high degrees of data literacy to be able to understand how to analyse, visualise and communicate data insights, as well as work with new predictive analytics technologies to assess and model both old risks, and new ones like cyber.
The future of Lloyd’s is, in the words of its CEO John Neal, a reimagining of the market. It is exciting how fundamental data and technology will be in this transformation and it will be important that Lloyd’s looks outside of the market to ensure it draws
on the very best ideas, innovations, and expertise to succeed. Taking a parochial approach to technology choices will be ineffective and not in the spirit of an institution whose success comes from taking a global perspective on risks and opportunities.