To invest or not to invest in insurance technology, that is the question
Deciding to switch from a legacy system to a modern operating system is always tough.
Add in challenging conditions in the insurance market and the ‘how’ and ‘when’ to do this can seem like impossible questions to answer.
Everyone knows it needs to be done. The good news for London Market firms struggling with this dilemma is that there is now proper momentum behind the market-wide plan to address London’s endemic lack of efficient processes.
The Target Operating Model’s (TOM’s) premise is to support the London Market modernisation plan by removing dreaded Londonisms ‑ London-specific processes – and developing effective shared services for non-competitive aspects of business. It also aims to ensure London Market brokers and carriers are plugged into a centralised system that enables their machines to ‘talk’ to each other using common standards.
And there are strong signs of progress. With the TOM’s key focus areas now quite clear, placing support through the Placing Platform Limited, the Central Services Refresh Programme and the Delegated Authority processes are starting to move forward nicely.
An inter-connected London
If it goes to plan, London is going to be an interconnected marketplace in which skill and experience combines with state-of-the art technology and operating systems. We rightly give the London Market a hard time as a lack of investment and foresight have left it open to criticism and claims there are slicker markets where it is far easier to do business. But compared to other global insurance markets, London already has shared services and shared interests. It uses more uniform processes and standards than any other market. The ACORD data standards are widely used whereas outside London, communications are more likely to occur in a mishmash of ways.
There is a real opportunity for London to set the standards and have the preferred operating model.
As international Lloyd’s and London Market firms become increasingly global in their ownership structures, it becomes even more important not to let Londonisms deter new owners from trying to integrate their London arms into their wider insurance operations.
What now with CSC?
At Xuber, we’ve stayed close to TOM developments and have worked closely with individual businesses on their modernisation programmes. Recently we’ve been asked how CSC’s acquisition of our parent company Xchanging will affect our work. It’s hard to tell how an acquisition will play out at this point, but given our respective strengths, we see it strongly positioning us to support the increasingly global nature of London-based operators.
A winning combination
By combining our insurance market knowledge with CSC’s proven ability to lead their clients through their digital transformation combined with their powerful partner alliances, this deal could become a catalyst for driving much faster modernisation and tackling some of the insurance market’s deep-seated challenges.
We need to make sure that while we are entrenched in the London Market agenda, that we think more broadly and do things that make sense for our business on a global stage.
If we get this right then I hope we will be a facilitator of the infrastructure improvements in London, connecting software and services together, and be entirely relevant to (re)insurers and brokers internationally.
How successful London is at securing its place as the leading insurance hub in the world depends on how well and how quickly modernisation is achieved. There is a real opportunity for London to be the number one market with a highly connected environment that achieves true “one-touch” entry and high levels of automated processing to un-lock a digital future.
It won’t just be the number one specialist market, London will also become the most effective and efficient market. It will then be interesting to see how other markets round the world and other insurers and brokers react to that.
To hear more about how London can effectively challenge market processes to drive innovation, I’ll be chairing a panel on Lloyd’s and the London Market at this year’s TINtech 2016 conference.
TINTECH BLOG: Steve Reid, Business Strategy Director, Xuber