Lloyd’s of London Syndicates accepted 60.2% of in scope risks through electronic placement during the second-quarter of 2019, while the use of Placing Platform Limited (PPL) amongst the International Underwriting Association (IUA) companies increased to 51% in the period.
This is according to the latest market-wide data for risks placed electronically in Q2 2019 that has been released by the LMG. Data shows that 100% of Lloyd’s Syndicates reported under the mandate, with the target for this quarter being to have placed 50% of all in scope risks through electronic placement.
In Q2 2019, Syndicates accepted 60.2% of in scope risks, which compares with 45% in Q1 2019. At the same time, IUA companies signed up to PPL increased from an average of 32% to 51% of in scope risks.
Chair of the PPL Board, Bronek Masojada, commented: “These numbers are a great success for everyone in the market and should give us all tremendous confidence that the London market has genuinely adopted electronic placement. We got here through a programme of steady and systematic action to change the way the market works.
“The next step is to build the same success in submissions as we have in risks bound, and our goal is to hit a target of 10% for submissions in Q4 of this year. We will be taking the same approach to this work – collaborating widely across underwriting and broking communities and taking one step at a time to gradually increase the flow of business that goes through the platform from start to finish.”
At 77.16%, Markel International Syndicate Limited 3000 topped the syndicate adoption table in Q2 2019, followed by Sirius International Managing Agency Limited 1945 at 76.84%, Neon Underwriting Limited 2468 followed at 75.54%, then Asta Managing Agency Limited 3268 at 74.71%, and finally Newline Underwriting Management Limited 1218, at 72.79%.
Chief Executive Officer (CEO) of Lloyd’s, John Neal, said: “These numbers are encouraging and demonstrate a market-wide commitment to modernise the way we do business at Lloyd’s. We must continue with this momentum as well as look to achieve the same success in submission rates.”
Louise Day, IUA Director of Operations, added: “The latest quarter shows a significant rise in the use of PPL amongst IUA companies from 32% to 51% of in scope risks. Some new members have recently taken up e-placement via the platform and have really hit the ground running. The introduction of the broker mandate has also made it more likely that more risks are being presented electronically to our members.”
While the numbers are on the rise and PPL adoption is seemingly increasing, it’s worth remembering that it’s questionable how much is actually placed at the time of placement versus backfilled after a transaction has taken place.
PPL’s increasing usage statistics are partly driven by the habit of backfilling old placements onto the system, something that has become a bit of an enterprise at some Lloyd’s players in recent months.
Hence, it’s difficult to truly gauge the impact of PPL at this time. Whether re/insurers are embracing it because they really want to, or because they are motivated to by having PPL target’s to meet.
Christopher Croft, CEO of the London & International Insurance Brokers’ Association (LIIBA), added: “There are now well over 100 broking businesses signed up to electronic placement, representing the vast majority of premiums placed in London – and 55% of risks bound are outside the Big Three brokers. This performance demonstrates that PPL has developed into a significant asset for the market as a whole. Now we need all market participants to continue to work collectively to ensure that it fulfills its undoubted potential to deliver a simpler, more efficient way for our policyholders to access our products and services.”
And Sheila Cameron, CEO of the Lloyd’s Market Association (LMA), added: “These figures are highly encouraging. It is critical that we build on the momentum that is seeing record numbers of risks being placed on PPL by working together as a market to understand and overcome any obstacles that remain to adopting electronic placing.
“The question is no longer ‘will the market embrace electronic placing?’ but ‘what does the platform of tomorrow look like?’ It is important to remind ourselves that this is a journey and we will not arrive at the final destination immediately. We must continue to ‘learn as we go’, so that we can continuously improve the platform and achieve the higher volumes that will enable us to fully realise the benefits in terms of the product we offer our clients, today and in the future.”