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We're not here to tell you the ins and outs of Blueprint Two (others have already provided some great summaries). Instead, as one of the technology companies supplying the Lloyd's market, we thought it was important to analyse how Blueprint Two will impact the market, and provide more context around the real-world changes the programme could bring. So we're here to explain how you can get your data and Rate, Quote, Bind & Issue platform 'Blueprint Two-ready'.
In order to operate in the digital insurance marketplace envisioned in BP2, members of the insurance value chain face a key choice when it comes to their existing technology and operations: what is the best way to extract and standardise data so it can be used in the Lloyd's marketplace?
To use Lloyd's systems, data must be suitable for use in the Core Data Record (the mandatory data set required to transact digitally), the Digital Spine (services that underpin the planned initiatives) and the Digital Gateway (where users will validate, enrich, route, store and report data from placement to processing).
This means it should be of sufficient quantity, good quality and in a suitable format. But how do insurers make sure their data will work within these digital initiatives? And does it make more sense to start from the ground up with their systems or add on to what they already have?
We think there are several solutions:
1. Use automation to extract and triage data at the beginning of the life-cycle for use elsewhere in the value chain
2. Procure a RQBI platform that has Lloyd's standards built in
3. Build upon existing RQBI systems to make existing technology Lloyd's compliant
This means that insurers and brokers will either have to adapt their existing ecosystem to operate with the new standards or consider a more foundational change that provides a stronger basis for further growth and development.
1. Automate submission data
Initial submission data is fundamental to the rest of the value chain.
Data should be considered before reviewing any other solution. The automated extraction of submission data is a valuable tool that is relevant when either procuring a new platform or integrating with legacy systems because, when manually undertaken, it is laborious, inefficient and low-value work.
Extract and augment
By automatically extracting, augmenting and standardising data from underwriting attachments at the beginning of the policy lifecycle (schedule of values, locations, claims history), insurers and brokers can harness all data points for downstream use in the other Lloyd's systems.
Standardisation could then be easily performed with all data received from coverholders in any format (such as Bordereau) and would allow for validation checks before conversion into the required format for integration with the Lloyd's Delegated Data Manager.
2. Add to existing systems
The reality is that some organisations are not able to make fundamental changes and replace their existing core systems. In this case, adopting tools that give the ability to integrate with existing Lloyd's applications is key.
The first step to this should be to make sure that existing applications are API-enabled: this allows for rapid integration with other third parties to build an ecosystem that is tailored to the company's needs and compliant with Lloyd's.
Policy and document digitisation
The next step should be to consider the addition of data extraction/enhancement tools onto existing technology so that data can be integrated across other systems, as mentioned in point 1. For example, technologies can be added on to provide the following functionalities:
- Machine learning-based solutions to turn policy documents (MRC/slip) into structured digital data, meaning immediate integration with other tools (triage/'smart follow' underwriting) and applications
- Policies can also be shared using existing channels (email/PPL) and transformed into the required format for usage within the BP2 framework
- Once a policy has been structured into digital data it is straightforward to implement automated decision making; "Smart follow underwriting" is easily achievable using this approach.
3. Build a platform
For an RQBI(ER) solution that meets Lloyd's standards, our first suggestion would be working with a platform provider to procure a Lloyd's-ready system.
Next generation insurance platforms should enable companies to build the insurance organisations of the future. Having a solid foundation is key, and whilst potentially the most disruptive approach, sometimes a significant step change in the short-term is required to deliver the largest benefits long-term.
Starting afresh means systems can include all the relevant Lloyd's integrations: data extraction and enhancement, triaging and prioritisation and so on.
Technology providers who wish to supply Lloyd's clients should also be aware of these standards and evolve to support relevant integrations for the other necessary components of digital onboarding. Where possible, providers should encourage clients to adopt these standards as minimum requirements, making integrations easier.
Some examples of these standards are:
- The Core Data Record, which will define minimum required data points
- The Digital Spine, which covers creating ‘valid’ policies only and iMRC should allow for real time digital negotiation between brokers and underwriters (defining standardised data points across the market could/should help reduce the amount of customisation and analysis required for each customer. You won't need to map one standard to another etc if it's all the same).
Overall, we see Blueprint Two as a positive step forward for the Lloyd's market. As to be expected with any overhaul, changes will take time and won't be straightforward. But for the whole industry, readying for these changes will require a focus on how companies look at and use their data. First and foremost, carriers and brokers will need to adopt and adhere to the new standards when they are set by Lloyd's.
This can be done via the platform method, or by building on top of existing systems–but either way, those that do this (and soon) will be ahead of the game when it comes to being Blueprint Two-ready, and build the foundation required to meet and exceed future targets mandated by Lloyd's.
The Artificial view on Blueprint Two
Artificial's key principle has always been to make insurance frictionless. We are encouraged by the positive reaction to the report and the extent to which it has been welcomed by the insurance and technology industries. This is a signal that, with strong leadership, the marketplace is ready to be at the forefront of digital change and hold its own in a changing global landscape.
At the core of our platform is the belief that insurance data should be captured at the beginning of the product journey and made available across the rest of the value chain, so we were also pleased to see this viewpoint vindicated in Blueprint Two.
Our CEO, Damian Arnold, reacted to the report:
"We welcome Blueprint Two as a map for the future of the Lloyd's market. As a company, we started with a digital foundation. But there is still an inertia to change in some parts of the industry that we know will not fully disappear until there is a more top-down approach from market leaders."
"It's clear that there has already been some adoption of digital technologies and we can see that BP2 will accelerate this even further to recommend and foresee enormous improvements in the marketplace. With the publication of Blueprint Two, Lloyd's is cementing its commitment to becoming a world leader in digital-first, fully integrated insurance."
A bit of background
Blueprint Two is a document released by Future at Lloyd’s, a programme focused on modernising Lloyd's and becoming the most advanced insurance marketplace in the world. In 2019, Future at Lloyd's released Blueprint One. The document outlined their strategy to digitise and reform the Lloyd's market, and included ambitious plans like 'Syndicate in a box' (of which several have been approved).
The project aims to deliver £800million in savings on operating costs for brokers, underwriters and business partners and to allow market participants to operate at a materially lower cost.
But how does Future at Lloyd's plan to deliver such an ambitious reduction? In short, the solutions are based around increased use of technology–particularly in areas where staff currently spend too long on non-value-add administrative activity.
The less time spent on admin, the theory goes, the more time can be spent on developing a broader range of new, innovative products and services that closely align with customers’ needs.
Why does it matter?
This report has consequences for companies like us who are looking to provide placement and negotiation platforms and other technology to clients in the Lloyd’s market, because:
- Vendors must offer a product that delivers for customers working in the Lloyd's market
- Vendors must adhere to Lloyd’s regulations to be viable as a platform (within that marketplace)
- Vendors should anticipate and be prepared for developments and changes in Lloyd’s market technology
For more information, get in touch.