Last year, Lloyd’s of London launched their “Future at Lloyd’s” initiative to build the “most advanced insurance marketplace in the world.” They followed up with the more specific Blueprint One, the “beginning of [their] plan to create a modern, more relevant Lloyd’s market and…lead the insurance industry for the next generation.” This is the start of an enormous process to overhaul and modernize how London does business, which is a lofty but noble goal considering London’s antiquated reputation.
Blueprint One consists of six “integrated solutions” including:
1. Complex Risk Platform - a digital platform to support the sourcing and placement of complex risks.
- The intent here is to help brokers market larger risks electronically to create ease of use.
2. Lloyd’s Risk Exchange – a digital exchange that enables instant search, quote, bind and issue across many products.
- The intent here is the risk exchange would be a “virtual trading floor.”
3. Claims Solution – a digital solution that routes claims and automates decisions for the simplest claims and assists in complex claim handling.
- The intent here is to speed the claims process and improve customer experience.
4. Capital Solution – a structure for investing at Lloyd’s with simpler rules and processes, supported by a new capital platform.
- The intent here is to improve overall experience of existing members and to attract new capital providers.
5. Syndicate in a Box – encourages new, innovative syndicates to come to the Lloyd’s market.
- The intent is to provide syndicate applicants structured guidelines for entry into Lloyd’s while allowing the applicant to prove a business proposition in the initial three years.
6. Services Hub – makes a wide range of innovative business services available to market participants and customers
- The intent is to aggregate services and provide a common portal where services can be easily accessed.
Lloyd’s plans to continue the transition/planning phase until mid-2020, overlapping with the Phase I rollout in January 2020. Phase II will follow in 2021, and Phase III in 2022. Blueprint One is the first in a series of blueprints which Lloyd’s plans to publish “at least annually.”
Now for the million-dollar question—how will this affect retailers and insureds? The ability of Lloyd’s to execute on their plan will be the true determining factor here. However, the vision of the plan aims to enhance Lloyd’s value proposition by offering more product solutions, simplify the process to obtain products, and encourage innovation.
At the end of day this should mean faster, more efficient access to London marketplace, more product from the London marketplace, all with lower acquisition costs…which ultimately means lower premiums, benefiting insureds.
The London syndicates will also be on board with this new plan, as Lloyd’s will get syndicates to agree to participate upfront for a percentage, and let the technology do the rest. Which translates to a steady gravy train for those syndicates as they’ll make money via the transaction.
As for brokers? Despite the move to automation, they’ll still be involved on more complex risks. Their role and way they do business will change, but they’ll still be around.
In a nutshell, the execution of this grand, well-intentioned plan remains to be seen—it’s a lot of work—and unanswered questions abound. Stay tuned.