London Market Forum: Responding to Blueprint Two

The market response to Lloyd’s Blueprint Two took up a lot of airtime at the recent virtual London Market Forum.

Opening the debate on the Blueprint, one of the panelists commented: “Technology leadership must be embedded throughout your business but equally we have to break down those silos, which often means that technology solely belongs to the IT department, that it belongs to technologists. The London market is notorious for having a high expense ratio. John Neil said recently that for every hundred pounds of premium, 35 pounds is spent on distribution and administration, and that’s unacceptable.”

That’s why the Blueprint is so important. But has there been a real focus in this area on expense reduction in London market organisations?

According to another broker panellist: “I think Blueprint One set really ambitious targets for overall expense reduction. Blueprint Two has been a little bit more realistic, more circumspect on what the targets could actually be. The Blueprint target is 800 million pounds of savings over the period specified. Systems are going to have to take advantage of placing opportunities. There’s a lot of talk in the Blueprint about the core data record. From a personal perspective and from talking to a number of colleagues across the market, it’s not so much expense reduction that we’re still focusing on, it’s the opportunity to leverage technology to drive new business models. We need to speed the time to market of being able to get new solutions in front of people so that we can capture more business. That at least from a broker perspective is where we’re getting a lot of engagement.”

Which area of the business do you feel would be the most in need of redesign and technology transformation? To answer this the next question in session, it was held that the initial capture of the data, which is reflected in the Blueprint, and the tools that we can deploy that speeds up digital transformation is going to have the most direct impact. It’s not sufficient to throw up a new portal to make capture of a particular line of business faster, you have to have a commitment that runs through the organisation.

One panellist said: “Downstream contract capture within the claims lifecycle will need to focus on improving, which will require close participation from our business units, helping us to define what it is that they need to operate better. It really is putting the business first and letting it help and advise rather than putting it first, and having massive projects that never get where they need to be.”

Collaboration is the key word here and it’s coming up on every group that we run in the insurance industry, which is changing. This will have to lead to collaboration with third parties, in cyber insurance, in particular, with a whole host of different organisations outside of the insurance industry in order to offer a solution and perform better.

Another panellist said: “There’s always a rolling investment improvement programme to get our data into the right place so you haven’t got this awful situation of expensive underwriting staff or insurance staff rekeying data into half a dozen different systems because it needs to be there. Of course, it’s about agility and knowing that your third parties also work in an agile way. I’ve heard so many times from third party vendors that we can support agile and then we have a tools conversation. Actually, I’m not interested in tools. I can buy tools with a credit card. What I can’t buy is mindset and culture. And that’s what I need to plug into. I need to plug that into the business, and third parties – we need to work together.”

What do you feel is the biggest barrier to driving business efficiency? In a survey held during the panel session, half the audience polled actually said that people and culture is the biggest barrier to business efficiency.

The next survey question was when it comes to new technology implementation in firms, what is the primary objective in your own organisation when trying to roll out new technology? Is it to get competitive in operational efficiency or is it competitive advantage. Do you want to improve customer service? Interestingly, operational efficiency came out just ahead of competitive advantage. Customer service came some way down the list again. That concluded a session that should offer some insights into the current direction of travel for those interested in digital transformation in the London market.