Lloyd’s managing agents hold significant advantages in the technology ‘arms race’ due to their ability to quickly deploy supplier InsurTechs and take distribution platforms global, according to a new study undertaken for the Lloyd’s Market Association (LMA) by management consultancy Oxbow Partners.
Analysts noted that Lloyd’s managing agents are generally more nimble than larger insurance groups, and can rely on Lloyd’s extensive licences to utilise distribution-based InsurTechs internationally, supported by their own relatively simple management structures.
The study also commended recent examples of tech integration amongst Lloyd’s managing agents, such as the Breach Response cyber product by Beazley and XL Accelerate’s collaboration with Gatwick Airport and Oxbotica, among others.
Oxbow noted that new data sources could have a transformational impact on underwriting at Lloyd’s, but suggested that data and digitalisation will require major cultural shifts, and will need to become a Board-level agenda point before managing agents are able to reap the full benefits.
Nevertheless, advanced analytics capabilities are already changing the products that insurers can sell, driving growth for companies and closing protection gaps for customers.
The SME insurance value chain is also being impacted by the emergence of cloud platforms, analysts at Oxbow said, which may become the ‘gatekeepers’ to customers and impact the sale of specialty insurance products and delegated authority business.
Additionally, InsurTech is increasingly becoming a trend in personal lines, and there is now evidence that new technologies and methodologies are affecting commercial and specialty insurance, the study found.
“InsurTech has moved beyond being viewed as a hostile entrant into Lloyd’s,” said Tom Payne, Director of Market Operations at the LMA. “InsurTech has arrived in the broader commercial and speciality markets – Lloyd’s heartland – and technology-led change will accelerate over the next few years, with innovation through new technology set to become the norm.”