Lloyd’s Chairman, Lord Peter Levene, called upon underwriters and brokers to move away from the paper-bound system that has barely changed for decades and embrace the technology of the 21st century. He made clear that without change the London insurance market would suffer, and warned that new technological developments would fail to deliver their full potential unless accompanied by a change in behavior.
Levene first spoke to attendees at the Insurance Institute’s President’s lunch, and later reiterated his remarks in a longer version to an audience of senior insurance professionals in a dinner speech. Both events were held at the Mansion House in London.
A written statement, prepared by Lloyds summarized Levene’s main priorities for upgrading procedures as follows:
– claims processing is simpler and faster;
– there is a greater degree of contractual certainty when policies are agreed. Over 50% of all slips at Lloyd’s are already in the new LMP format; and
– new technology is used to reduce paperwork.
He cited three key initiatives currently underway to help transform the market:
– LMP – a modernisation programme that aims to transform, simplify and speed-up market procedures and change behaviour;
– Xchanging – a joined-up service provider that is re-engineering policy production and claims accounting; and
– Project Blue Mountain – a new IT product that will enable brokers and underwriters to communicate to a degree never previously possible.
“I have never come across an industry as paper-bound as the London insurance market, and I have to say that it even surpasses the Civil Service in its volume of paper,” Levene stated. “It’s odd to think that the fundamentals of the insurance industry have changed so little since the days of Edward Lloyd’s coffee shop. As an industry we have taken many steps forward but we need to go further if we are to maintain our position as the global market’s premier trading centre in the 21st century.”
“For the first time in many decades there is light at the end of the tunnel,” he continued. “There are three initiatives that hold the key to the future of this market. These are London Market Principals, Xchanging and Project Blue Mountain. They apply 21st century thinking and technology to problems that have dogged us for decades and have the potential to make significant inroads into our timings.”
“However, in order for that full potential to be reached, the whole of the market must play its part. We can put forward technical solutions, but unless we are prepared to adopt them, to develop them, and to change our well-worn rituals in accordance with them, we will never deliver the degree of change that is now within our grasp.”
“We all know that change is necessary but too many of us are willing to watch others make the change before taking that step ourselves. Much of our franchise implementation programme will go to waste if improvements in underwriting standards are not matched by substantial improvements in processing standards. ”
It’s true that conditions are now the best for many years. But like an arctic summer, the London market has a relatively brief window of opportunity in which to take advantage of them and make the necessary improvements and I would urge you not to miss the chance,” Levene concluded.
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