The UK Insurance Market continued to change in Q3 of 2015 with notable speed.
In November 2014, The publication of ‘London Matters’ by the LMA and Boston Consulting Group, identified London’s position as the undisputed global market for specialty commercial insurance is under threat. Today the London Market is facing a number of significant challenges ranging from customers have a preference for buying insurance in their local market; London is losing its share in reinsurance to the comparatively high cost and regulatory burden in London as opposed to international locations such as Singapore, Dubai and New York.
In Q3, our clients across the London Market have initiated projects to address this need for change and introduce efficiencies through the adoption of a centralised utility platform for placing and endorsing risks. The objectives are to provide a single channel for all risks to be placed in the London market, holding key data centrally providing an efficient solution which is both time and cost effective.
Affecting all Underwriters and Brokers in our community, this will not be implemented without significant resistance to changing processes and procedures which have lasted over 300 years. At Venquis, we have already seen the need for highly trained contract Change Management Professionals with deep experience of working in the London Market to communicate the benefits of electronic trading effectively and ensure the platform is truly fit for purpose and reinforcing London as the world’s number one global insurance market.
Supporting the need for extensive change in market behaviour we have seen an increased drive for the creation and implementation of new data strategies and tools to turn this “raw data” in to useful business intelligence. Unlike General Insurance or other industries such as retail, the Lloyd’s Market does not receive enough data from one specific field to use something coined “big data”. They do however have enough new an historical data to make better underwriting decisions based i.e. historical claims data. As a result Managing Agents have been making increased efforts to build Enterprise Data Warehouses’ (one central storage point) with more advanced data manipulation tools used for reporting, for both a current and future state.
As mentioned, the General Insurance market has pioneered strategies such as predictive analytics, allowing underwriters to grade a risk on multiple data sources such as a client’s internet activity or shopping habits. Is this something the London Market can learn from, adopt and increase market share and profitability?
HOT OFF THE PRESS – as of the 17th October a new innovative technology-led claims functionality went live, which is a major step in the modernisation of Lloyd’s and the London market. The new message-based technology allows the IT systems for London Market insurers to interact fully with the market’s central claims systems, ECF2. The eight carriers implementing as early adopters are: Ark, Berkley Offshore, Brit, Faraday, Liberty, Mitsui, Endurance and Talbot. The software providers delivering Write-Back functionality for these carriers are: Charles Taylor, DOCOsoft, Fineos and Sequel.