By Tyler Cichewicz
For over 300 years Lloyds of London has done business face-to-face and on paper. Brokers meet with Underwriters and a decision about coverage is reached, whether this was for a ship’s cargo or Bono’s vocal chords.
This past July, in an attempt to modernize, Lloyds sold its first policy online. The sell was a terrorism policy and is part of a string of reforms called the ‘Target Operating Model’ aimed to make the London Market friendlier for commercial insurers to do business.
“This opens a new chapter on how we do business,” says Ben Reid of the London Market Group, an insurance association.
This new chapter will run in tandem with London’s traditional face-to-face method.
Lloyds of London has made attempts in the past to modernize their transactions. More recently, Brokers and Underwriters were encouraged to use Ipads instead of paper but as with other attempts, this new method did not take to the market as a whole and failed to last.
David Ledger, the chairman of the company running the new system, says the online method allows brokers and underwriters to see policy information in detail and will cut costs, reduce error, and improve security.
Terrorism policies were selected because of their small market and are being used as a trial policy for this new method.
“We wanted to go live with a class of business that was fairly tight in terms of number of brokers and carriers- we’re going live with nine brokers and 42 carriers,” Ledger says. “The next line is professional indemnity, which is much broader from the perspective of brokers and carriers.”
Eventually this system will be extended to the entire market but that will take about two years.
“The basic reason [past efforts] failed was that it was never possible to get unified agreement across the market,” Ledger says. “This is the first real example where the whole market has come together.”
With the effects of Brexit pending and the passporting rights of UK businesses in jeopardy, it is more pressing that London finds ways to stay competitive.
Download This Article