In the second of our “Shaping the Market of the Future” series of events, r10 and representatives from brokers and carriers met to discuss one of the most pressing challenges – The Future of Distribution.
The workshop was well-received. Both brokers and carriers shared their perception on the progress of successfully adopting electronic placing, within their organisations and generally in the market.
What did the key themes include?
1. Fully committed to electronic distribution
Without doubt, there is strong commitment across the market to modernise distribution strategies and adopt electronic placement technologies. Many entities in the market are investing heavily in digital transformation and the “Future at Lloyd’s” consultation is being welcomed with cautious optimism.
2. Need for a more integrated solution
Overwhelmingly the market is looking for solutions that would integrate closely with existing broking and underwriting platforms. Without integration, the re-keying required and concerns about version control are primarily driving behaviours to using systems for recording bound lines, rather than as quote and bind platforms.
Tighter integration was seen as essential to the earlier adoption of electronic platforms in the placing process and the realisation of the desired operational efficiencies.
3. Standards are needed for interoperability
There are multiple platforms offering electronic placing capabilities approved for use by Lloyd’s and the availability of choice was welcomed as a way of providing competition and innovative features. This feeling was, however, tempered with concerns around the cost and complexity subscribing to multiple platforms.
The market needs to define and adopt interoperability standards, so that submissions, quotes and bind requests could be generated from different applications but able to work seamlessly across organisations and allow closer integration at the end-points.
This will still allow innovation and competition at platform level, but accelerate the move to fully electronic placing.
4. Mid-tier brokers should collaborate where possible
The organisational and technological changes required to maximise the benefits from a move to electronic distribution are significant and not all brokers have the bandwidth to keep up with the investment, some larger brokers are able to commit.
Mid-tier brokers have an opportunity to collaborate on non-proprietary elements (liaison with software houses and market organisations) to accelerate their adoption and share best practise.
Smaller entities are typically more agile and able to move quickly, however are left at a relative disadvantage while adopting current market-wide programmes that are slow to respond and deliver.
5. Clients have to be encouraged to “Go Digital” too
To maximise the benefit of electronic distribution workflows, clients may also form part of the ecosystem. When designing a digital distribution strategy brokers might look to on-board their wholesale clients to create a “digital flow” – starting at origination.
Digital solutions need to extend beyond the “Lloyd’s triangle” and allow much tighter integration, providing structured data that can flow back and forth to all parties involved in the transaction. Increased emphasis on digital flow will significantly reduce operational costs and greatly improve the service for clients.
6. Recruitment needs to focus on future skills
In an end-to-end digitally distributed market new skills are essential. Boards will need to weigh up where the best return on investment lies for new hires, which is more likely to be between business development and technical skills.
r10 continue to develop a forum for focused output on the way we adopt and adapt to market change. Do get in touch if you wish to take part in future events, with others who share this enthusiasm and are already delivering within their own organisations.
Author: Chris Carney