Why now’s the time for insurers to invest in new technology

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.

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 that London Market brokers and carriers are plugged into a centralised system that enables their machines to “talk” to each other using common standards.

There are strong signs of progress as key focus areas become clear.

An inter-connected London
If all goes to plan, London will be an interconnected marketplace in which skills and experience combine with state-of-the art technology and operating systems. We rightly give the London Market a hard time when talking of innovation, 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 next?
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 No. 1 market with a highly connected environment that achieves true “one-touch” entry and high levels of automated processing to unlock a digital future.

It won’t just be the No. 1 specialist market; London will also become the most effective and efficient market. It will then be interesting to see how other markets and other insurers and brokers around the world react to our progress.


Steve Reid is Business Strategy Director of Xuber, a CSC company.

RELATED LINKS

Why the case for change in insurance is more compelling now

Tapping into digital minds in the London insurance market

The vision of a global digital insurance marketplace

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