Building a data-driven insurance market

Digitising the insurance market

The London insurance market insures large, complex, unique and awesome things.

We’re not talking two weeks in Tenerife or the contents of your garden shed. Think footballers’ feet, global property portfolios and the public exhibitions of priceless artwork.

Over 50 years ago Lloyd’s covered the first commercial communications satellite in orbit. And the London market is still enabling progress today.

Without proper insurance, green infrastructure won’t get built, new businesses won’t launch, global supply chains will keep their ships in port. Made up of more than 350 underwriting companies and broker firms, the risks it takes on earn the market more than $120 billion in premiums each year.

Until recently, the market negotiated and agreed deals the ‘old-fashioned’ way, exchanging a wealth of data on physical documents. With modernisation in mind, the market’s biggest players are taking steps to digitise. Leading the way is Lloyd’s with its Blueprint Two strategy, designed to bring the companies together to capture market data and make its processes better, faster, and cheaper. 

At the centre of the market’s digital services sits not-for profit organisation Placing Platform Limited (PPL). Its online platform supports the market at the first stage of the insurance life cycle, where companies come together to price risks, negotiate and ‘bind’ or agree cover. 

If captured automatically the extensive amounts of data generated by these processes could be used to unlock huge gains for the sector.

In 2019, PPL began updating its platform with modern, flexible tech that could underpin the digitisation and data capture required to unlock market benefits outlined by Lloyd’s in BluePrint Two. 

Now, through its NextGen project, PPL is leading action across the speciality insurance market to automate these processes, with digital transformation and culture change across the sector’s 400 companies. 

“There will always be room for face-to-face negotiation for specialty risks,” says PPL CEO Joe Gordon. “But where it makes sense to automate, digitise and make better use of data, that’s what we want to do.” 

Keeping the market moving

Digitising one business is difficult enough. So how does one small company lead such change?

“Medieval ships navigated themselves by the North Star,” says Joe.  “When it came up at night, they could correct course, to make sure they were still moving towards their target. That’s the way I see this. We have a clear direction, but it’s complex and we expect challenges along the journey.” 

With a board made up of representatives from across the London markets, consultation is embedded in PPL’s business.  While acknowledging the importance of pragmatism, Joe is also mindful of the international markets strengthening their speciality-insurance offers, like Singapore and China, and the need for London to stay competitive. 

“In the London Market, there are very high costs involved in administration and supporting processes which, ultimately the client ends up paying, so there's real value for customers to be achieved in collaboration between all participants. 

“The market has to keep moving, so we work together to accommodate the change and business’ day to day needs,” he explains, “but that doesn’t mean some change can’t happen quickly. 

“Before COVID-19 hit, two million transactions a year were made with physical stamps but, overnight, that was done digitally on PPL as people worked from home.

Change can happen

“From a distance, the London Market looks quite set in its ways, but that doesn’t mean that change can’t happen quickly. Before 2019, all trading was done face-to-face and recorded with physical stamps; today the vast majority of those transactions – over two million per year – are done digitally on PPL.

“The first big wave of NextGen, where we are now, is about reducing frictional costs, establishing data quality, smoother processes and faster customer service.  The second wave will focus on innovating for the future, through an accelerating program of digital integrations, and the transition to “data first” trading.”

“When we started working with PPL on NextGen, it was clear that we had an opportunity to help bring about real change for a historic, critical UK industry,” says Deloitte partner Andy Lees, who leads the firm’s work with PPL. 

“And that this would be a multi-year change programme to be achieved in stages, working collaboratively with the market. 

“For us, digital transformation is about adding value, and this tech is designed to enable PPL to do that. In this case, updating its platform to make the day-to-day work of brokers and underwriters quicker and easier to do. And by capturing the data in a structured way, so it can later be analysed and used for the benefit of the industry.”  

A new digital platform

With the first part of the transition underway, the market has transitioned to the new PPL platform with minimal disruption, and new business is set to be conducted on it by the end of the year. The next stage is for the market to begin realising the benefits of the tech, as companies start to interact in new ways and exchange data.

“This project is huge in scale and our relationship with Deloitte made this progress possible,” Joe explains. “We’ve faced many challenges together. I see it as a true partnership.” 

In the longer term, Joe’s ambitions are for PPL to expand on the service it offers, providing a space similar to an app store where innovators from across the industry can sell add-on programmes that enable the whole market to better use its data. 

Acknowledging there’s a long way to go, he sees the sector’s goodwill as a huge boost to progress. 

“We’re building a resource for the market – so the market wants this to succeed,” he explains. “We can call on senior executives around the market whenever we need help.   
“They also tell me when we can do better, which is how it should be.  But if we ask for support, we get it, and that’s a great situation to be in.”