Adapting to technological change and better integrating digital capabilities to make placing and processing business more efficient is the key to overcoming the challenges of poor expense ratios at Lloyd’s, according to Chief Operating Officer Shirine Khoury-Haq.
Implementation of key parts of the London Target Operating Model (LM TOM), as well as Lloyd’s electronic trading platform, Placing Platform Ltd (PPL), are supporting this digital push, but adoption of these services is not happening quickly enough, Khoury-Haq said.
“We must adapt in order to remain relevant,” Khoury-Haq explained. “Placing and processing business must be made easier and more efficient in order to make Lloyd’s more attractive; both in London and in local markets.”
“Unless the market moves together it will not reap the benefits and reduce costs,” she added. “Without higher levels of adoption throughout the market we put our investment to date at risk and we are in danger of seeing administration costs rise further.”
By better utilising data and technology, and by implementing LM TOM, Lloyd’s is aiming to reduce its market expenses by £145 million cumulatively by 2020.
The insurance and reinsurance marketplace is currently mandating the use of electronic placement on a phased basis over time, and Khoury-Haq said that Lloyd’s will continue to explore other ways to improve its own efficiencies, while clarifying the services that it offers to the market.
Lloyd’s rolled out PPL to Marine, Property and Casualty business lines this year and implemented the LM TOM’s Central Services Refresh Programme (CSRP), which it says delivered premiums and claims processing capability.
Going forward, it plans to focus on improving adoption for electronic trading and CSRP, as well as on embracing new ideas such as using blockchain technology for the claims process and embedding a new account manager model for the way it interacts with managing agents.
“Economies of scale by providing services centrally for the benefit of the Lloyd’s market is a common theme, not just for the LM TOM programme but also for the services that the Corporation offers to the Lloyd’s market,” said Khoury-Haq.
“Enhancing and building on these services is important for delivering a successful market within which participants can not only compete for business, but also compete collectively as the world’s leading (re)insurance market,” she continued.