Data is the Golden Thread
The next phase of Lloyd’s Blueprint 2 is data standards. When you look at what’s within Blueprint 2 and the focus on placement, claims and delegated authority, the golden thread that stitches them together is data, and the digital spine. So, the next generation of PPL is being able to plug into that, to provide the data that will then pass through the entire life cycle of a risk within the Lloyd’s marketplace, which is critical.
Systems take a long time to develop. If we had stopped PPL two years ago when it came in for a lot of criticism then we wouldn’t have had a new system, and we wouldn’t be where we are today. It’s not perfect, and there’s always a better, sexier platform around the corner. As one panellist said in an insurance conference last year, it doesn’t matter if you buy a new car, guess what, six months later, a new better one comes out but you don’t change your car, you carry on driving it for a couple of years. And that’s what we’ve done.
Standard data applicable to every platform, not just PPL is key to the future digitalization of the market. The API technology we’re using now has only been developed in the last five or so years. Many market participants didn’t know what an API was five years ago. There are, however, new capabilities in the current system to use API’s so those companies that would like to be part of the trialling process that is currently going on should get in touch with the PPL team.
One aspect that COVID-19 has brought to the fore far more quickly than maybe it would have done before is the virtual underwriting environment, or to be precise the benefits of the physical versus virtual trading environment. The pandemic has shown that we can use technology in different and productive ways. But we continue to be a marketplace based on judgements informed by people, meeting each other, and understanding how they think, how they act.
We can always see a role for a physical marketplace. It might have to be reconfigured to allow better use of the communication advances we’ve made. But I still see a need for a physical marketplace. Nonetheless, as has been mentioned by senior insurance figures at Lloyd’s, we are a 3D market. We’re based on interactions with people who have known each other for a long time. Different companies engaging in a physical marketplace acts as an epicentre for that type of environment. I see the two complementing each other and we might have to reconfigure that physical marketplace to allow for better use of e-commerce.
Just under two years ago, the fourth floor at Lloyd’s, for example, was still an underwriting floor. It isn’t anymore. The third floor was fully an underwriting room and it is now about half. And this is pre-pandemic. So, whilst I think the pandemic has accelerated this, I think this was already in train in terms of trying to use the space differently and enabling electronic trading. It needs to be a balance of both based on what the needs are and based on what we have to do for our clients.
The market needs to have conversations around why we are meeting, and what sort of collaboration are we going to have? How do we facilitate, particularly those who are new to the market? How do we facilitate integrating them into the market, which is so relationally driven? We need to enable that going forward. We need to have 3D and 2D interaction. It can be a mix of digital and physical.
The great thing about digital for London is it grows the London market pie. We are all assuming about digital is that it is about how people do business in London with other people who are in London. The great opportunity on digital however, is how do we do business with people who are not in London in a more efficient way? The opportunity in digital is to grow the pie around the world.