A recent talk with the theme of “Back To The Future” led me to consider whether the London Market is the place we would have dreamt it would be 30 years ago.
Certainly, Lloyd’s has changed in unimaginable ways since then. Thirty years ago, the market stood on the brink of a barrage of claims associated with asbestos that put many names out of business and into bankruptcy.
Other huge loss events, including the Piper Alpha oil disaster in 1988, would follow during that decade and add to the market’s woes. It was, of course, a troubled period that would trigger vast market reform, which continues today, albeit in a different chapter.
The speed of modernisation within Lloyd’s and the London Market has long been a moot point for those involved in the process and those affected by it. However, in recent years the risks associated with taking reform too slowly and too cautiously have grown increasingly stark.
Reform of the marketplace, which started with the formation of reconstruction and renewal settlements and an end to self-regulation of Lloyd’s in the 1990s, has progressed through many stages and some false-starts to address new and emerging concerns. Today the modernisation programme is focused on the Central Services Refresh Programme, as well as the London Market Target Operating Model.
At the heart of the modernisation programme is London’s need to offer the right products, services and processes to compete on the highly competitive global stage.
Brokers want to give their customers value for money and will take their business to the market providing exactly that. London may still have specialist skills and knowledge, but it needs to provide the same slickness and value as rival markets around the world – be they in Bermuda, China, Dubai or Singapore.
London is on the right track with its modernisation programme, which has brought unprecedented change in recent years. But it cannot afford to falter. Xchanging, a CSC company, remains closely involved in this reform through initiatives that drive new ways of doing business, including greater straight-through processing, therefore capturing data once and earlier in the cycle; and standardised messaging, which improves companies’ ability to trade globally.
Global competition will continue to rise and, as a result, the next 30 years could bring about greater change still. London’s insurance market must ensure it uses the tools, the technology and its vast skills to stay ahead.
Adrian Guttridge is Executive Director of Xchanging, a CSC Company, Global Insurance Service.