What does the year ahead hold in store for claims?
Fewer years have had more twists and turns than in 2020. A year that began with rising global trade tensions, horrific bushfires in Brazil and Australia and a US presidential impeachment trial also saw a global pandemic put the world’s health and care services under extreme pressure and lockdown everyone’s offices, bringing economies to their knees. The end of the year saw a change of administration in the U.S., the UK finally leaving the EU after 4 years of increasingly rancorous debate and, if anything, increased geopolitical uncertainty as we head into 2021.
Against a backdrop of rising rates and growing returns, how should carriers look at the short, medium and long-term impact of Covid-19? How should the leadership of the London Market be positioning itself? Finally, more than one year on from Blueprint 1, where are we now? PPL started over five years ago and predated Blueprint 1, but it’s the initiative and the support that Blueprint generated that has accelerated momentum, most visibly through the Lloyd’s mandate.
It’s amazing to think that two years ago, not much more than 10% of risks at Lloyd’s were closed through PPL or electronically. Pre-pandemic that reached 80% and at the moment is running around 90%. In terms of the volumes, without PPL, the London market and Lloyd’s wouldn’t have had nearly as good a pandemic as we’ve had thus far from the perspective of being able to trade business.
To give some numbers: as of the beginning of November 2020, 150,000 risks had been bound through PPL in the preceding 52 weeks. That was placed with more than 500,000 different carriers, Lloyd’s Syndicates or companies. At the same time 350,000 midterm adjustments were processed through PPL, so Blueprint 1 created the momentum to drive that forward.
There has been fantastic progress since Blueprint 1 at the beginning of 2020, not just in respect to PPL where Lloyd’s also took an ownership stake within PPL, but also four launches for Syndicate in a Box.
The LMA started conversations around lead follow standards. Lloyd’s have implemented the virtual room. In addition to all of that, we’ve got going on the cultural dashboard, the cultural toolkit and the cultural targets across the market for gender balance with a view to move towards some ethnicity targets next year.
Blueprint 1 was about simplifying how we do business at Lloyd’s and making it cheaper to do so in the meantime. I think embracing intelligent change was central to its themes and what this year has told us is that we can use technology in a productive and complementary way. PPL is a good example of this. But we can also make Lloyd’s an easier place to do business.
The move to digital trading means there is no going back. The argument that you can only do everything we do in the London market face to face has been absolutely put to bed.
However, one of the reasons that we’ve been able to trade successfully in this period of time has been because of the social capital and relationships built in what I call colloquially a 3D world.
As we go forward, I think we will see, once we adapt to the new normal, a mix up of digital and 3D coexisting side by side, much like business done in Bermuda, where there are discussions during the course of the year with clients about what they are seeking to achieve. And then placement will be taking place electronically. In terms of what PPL next generation is seeking to achieve, it’s very much moving to a data, supported by document, environment.
Blueprint 1 has set out is to have clear data standards around the information, which will be required to be collected during the course of a placement. That standard will be applicable to every electronic trading platform, not just PPL. That will then get to the new Lloyd’s gateway, which will then be able to drive the accounting and settlement process and take out huge costs through the system.