For the London insurance market to survive and thrive, having the customer perspective at the centre of everything we do is vital, not just for the insurers and brokers but also for the rest of the ecosystem that supports the market.
The London Matters report was first commissioned in 2015 to find out what our customers want and establish the challenges and opportunities that the market faces. It found that our customers want us to continue to be innovative in delivering new solutions to transferring risk, they want us to be closer to them in new markets and they want us to be more accessible in every way.
Our overriding mission is to make the market highly accessible, efficient and relevant to the needs of our customers. We want to deliver simplicity and reduce the cost of doing business. We want to make London an easier place to do business.
Harnessing the power of co-operation
When it comes to adopting the latest technology and platforms, the global insurance industry has lagged behind other financial service providers and industries. The London Market has 350 companies all operating within 500 metres of the iconic Lloyd's building, turning over £60bn a year and accounting for nearly a quarter of the City of London's GDP. While this diversity provides competition, diversification and choice for our customers, it means that transforming how we work is a challenge.
We do, however, have some unique and beneficial features. The camaraderie and collaboration in this market does not exist anywhere else in the world. It is a real community and harnessing the power of that passion and commitment can really make things happen. We see that amazing spirit after a disaster - a 9/11 or a terrible natural catastrophe, the London insurance market steps up and pays claims and keeps taking risks. However, in the last two years we have also been channelling that energy and spirit to improve the buying experience for everyone, but most especially for our customers.
Taking a holistic view
The overall objective of the London Market Target Operating Model programme has been to build a solution for straight-through processing and reuse of data to enable this objective. The programme centres on replacing administrative, paper-based processes with more efficient and transparent systems across the entire market process. It is not about replacing people - the foundations of the London Market's reputation for insurance excellence and specialist expertise - but about taking friction out of the market and making it more efficient and transparent.
From the first moment of the buying process when the client asks for a quote, to when claims are paid, we needed a programme that looked at every step. We were also insistent that the 'magic' of the London Market, the relationship-based, face-to-face negotiations that are the bedrock of the market's success, were retained.
The journey so far
We want clients to be able to place their risks in our market as efficiently as possible. At the beginning of this process there are extensive and complicated negotiations where brokers talk to a number of insurers about taking on risk. In insuring an iconic building, a unique piece of art or a North Sea oil rig - a lot of information is required, and it needs to be shared with many people. The London Market can now do this digitally. This may not sound cutting edge for other industries, but it is a huge step forward for the market and we are proud to be the only international insurance market in the world with a digital trading platform.
Electronic placement is about We aim to capture risk information once and share it with many market participants. Ultimately, that will flow all the way through the process.
We have made some great strides in looking at the data, currently held in paper form or in unstructured formats, that the market shares. In the first case we have had success in extracting key data from non-digital contracts and turning it into universal messages so that everyone in the market has one source of truth for the data it holds. The next challenge was getting everyone in the market to speak the same language. We have been focussing on building global and standardised data formats, using ACORD messaging. Core terms are not always universally used or understood so we are creating a lexicon that can resolve that issue. Again, this will mean that our customers will see fewer errors and a more streamlined process.
Future proofing the market
We are proud to have been successful so far in delivering to our programme's goals but we still have more to do. Our objective is to construct an operating model for a digital world. It focusses on London's need to offer the right products, services and processes in order to continue to lead on a highly competitive global stage. With market businesses collaborating to improve every step of the risk transfer process - from quote stage, to when a claim is paid, through to risk renewal - the London Market is hoping to equal its reputation as a world leader in risk solutions with its technological advancement and value.
Shirine Khoury-Haq is programme sponsor of the London Market Target Operating Model and director of operations at Lloyd's