Insurance firm Lloyd’s of London has announced technology-led plans to increase efficiency and drastically reduce operational costs, including splitting its business into two exchanges.
Under the far-reaching reforms set out in a prospectus called The future of Lloyd’s, the 330-year-old company will focus on accelerating development of products and services to meet customer demands, such as simpler access to services as well as lower costs.
“Technology and data analytics are disrupting traditional business models,” said Lloyd’s chief executive John Neal. “Customers are facing new risks as their asset mix shifts from tangible to intangible and, consequently, are seeking new insurance products and services to protect their businesses.”
The reforms include the introduction of a digital platform for complex risks, while standard contracts such as small marine cargo agreements will be placed through a separate online platform called Lloyd’s Risk Exchange “in minutes and at a fraction of today’s costs”.
A “syndicate-in-a-box” approach is also part of the plan. According to Lloyd’s, this aims to offer a structured pathway for innovators to bring new products and business into the reinsurance market.
The proposals underpin a consultation that will last 10 weeks. Prototypes will start being built and developed from October 2019 and Lloyd’s expects some projects to go live early next year.
It says full services based on the trials will be built and delivered on a case-by-case basis, with those using existing off-the-shelf technology being delivered earlier than those that require building from scratch.
Lloyd’s also plans to “supercharge innovation” and expand its innovation hub into a product development incubator involving entrepreneurs, tech companies, brokers and underwriters in the analysis of new risks and development of new insurance services.
“We will succeed by harnessing the entrepreneurial and innovative spirit that is at the heart of Lloyd’s,” said Neal.