Lloyd's of London implements first phase of the Future at Lloyd's
The market's first risk exchange pilot program also begins in 2020. It will connect broker and e-trading portals.
Months after announcing its plan to become the most advanced insurance marketplace in the world, Lloyd’s of London published its execution plans for the first phase of the Future at Lloyd’s.
As part of those plans, Lloyd’s also confirmed that the Corporation will take a 40% stake in the London Market’s electronic placing platform (PPL), which will form a key component of the new complex risk platform.
The update also confirms that the first risk exchange pilot will be trialed in 2020, connecting broker and e-trading portals. The risk exchange is a digital exchange that will connect to existing systems to provide a new interface for insurers to instantly search, quote, bind and issue commoditized risk. Lloyd’s CEO John Neal says “it will utilize existing market behaviors and re-engineer them to drive value at minimum disruption for participants” and “improve the speed of placement.”
Phase 1, which began this month, will allow risks to be bought and placed using standardized data while simultaneously developing a “data-first” capability to improve the broker, customer, and underwriter experiencer; deliver a more efficient and transparent claims service; and optimize support processes and insights.
“Everything we are doing at Lloyd’s is designed to increase the market’s relevance, reduce its costs and increase the policyholders’ confidence in Lloyd’s,” says Neal.
Phase 1 priorities
In terms of priorities, Neal outlined the following for Phase 1:
- Complex risk platform: Lloyd’s will complete its investment in the PPL, the London Market’s e-placing platform set up in 2016 to create a single market solution for electronic placing that would allow brokers and insurers to quote, negotiate and bind business electronically. The investment will help support and influence its future design to develop the document-plus-data component of the complex risk platform.
- Lloyd’s risk exchange: The Lloyd’s risk exchange will start by connecting a small number of digitally-enabled market stakeholders to prove connectivity and develop standards. Lloyd’s also plans to develop common digital services to enable scale-up and roll out across the whole market.
- The claims solution: The priority for the claims solutions is to deliver improvements through targeted initiatives, such as automating the settlements of low-value claims and re-engineer processes to focus on accelerating payments and streamlining claims. He added that they’ll look to replace ECFs and associated claims infrastructure to prepare for the new platform.
Additionally, Lloyd’s will also prioritize three initiatives in 2020 that will create the essential infrastructure and lay the groundwork for the Future at Lloyd’s ecosystem. These are data and technology architecture, lead/follow (modern syndication of risk, and middle and back-office transformation.
“For brokers and insurers, the risk exchange will make the process simpler and will lower their costs of doing business. In doing this, it gives brokers and insurers more time to focus on complex risk placement and [gives] them a chance to provide customers with valuable advice,” says Neal. The other five phases will be rolled out over the next three years. The ecosystem is designed to create a one-stop-shop to buy and sell insurance.
Learn more about the Future of Lloyd’s here.
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