Episode 12: Megamarket

I’ve been interested in reports that more major international insurers are interested in setting up a stall in the Lloyd's insurance market. Most recently we hear that Santam Insurance , South Africa’s leading insurer, is in discussions with Lloyd’s about a market entry, along with national champions Allianz Global Corporate & Specialty (AGCS) (Germany), Generali (Italy), Sompo (Japan), and IAG (Australia), and others.

It’s a marvellous ambition for Lloyd’s to become a marketplace where all the world’s major international carriers synergise to tackle risk issues that demand collaboration, and work side by side to provide coverage for the most complex multinational risks, those that require syndication. Alongside that, already it’s where many smaller underwriting units and MGAs thrive, others get their start, and the most promising insurance technologies are incubated (in the wonderful Lloyd’sLab).

For a marketplace with a 325-year history, this evolution is a logical follow-on development after the painful introduction of corporate underwriting members and insurance capital in the mid-1990s. Looking back from the 2090s, I expect it will look like that was the plan all along.

Lloyd’s may have become the obvious place for international carriers to serve their multinational clients better, develop international risk portfolios, and stay at the very front of developments in insurance, but it’s not yet the exemplar of efficiency. I don’t want to bang the same old drum, but a world-class market needs world-class technology, or its clients will pay too much.

Happily, the market’s approach to technology is also evolving. I’m pleased to see the former central focus on market-wide initiatives has been eased, and is now matched by broad recognition of the value of third-party technology initiatives. The Corporation of Lloyd’s is now much more receptive to hearing from, working with, and recognising the value of third-party ventures in the technology arena.

A competitive market for insurance technology solutions is a healthy market. Even where multiple corporations cooperate to insure the largest risks and foster development of new ideas, it's essential that suppliers compete to ensure digital services are not only constantly improving and therefore the best possible.

Competition will also ensure they are differentiated. Market members need to be able to choose the exposure management platform, payments system, underwriting workbench, or whatever that best suits their business, the types of risks they underwrite, and of course their clients’ needs.

We at Quotech are proud to be part of the Lloyd’s universe of suppliers. I'm personally really excited to see that even more of the big hitters from around the world are now wanting to get involved. Let’s not let them down with antiquated IT! ??