Integrating to Future at Lloyd's
Shorter one today. Praise be.
Some comments on my recent article on the market’s readiness for data (here) touched a nerve and I’d like to expand on one aspect of the argument here in somewhat less ranty terms than my colleagues have had to put up with.
If Future at?Lloyd's?don’t get this one thing right, then pretty much everything they have spent millions on in the past few years will be put at risk.
To be completely fair, it's not just a potential issue for Lloyd’s.??It is for PPL and DxC too.??In fact, it applies to anyone in the centre of the market who's got a technology initiative to make a success of.
In essence, the market's central initiatives have, over the decades, consistently failed to understand that technology?vendors,?both?here in London and abroad in the distribution chain, need to be given a sound commercial reason for engaging and integrating with the?initiative.??Otherwise they can't or won't do it.
I can say this with complete confidence having formerly been a PAS (policy administration system) vendor and we grappled with this very issue on several occasions, either reluctantly withdrawing to the sidelines or engaging at considerable cost with precious little, if anything, to show in return.
Integration is expensive and, as the demands of conveying more and more data across those integration channels increase, it will only get more so.
Yet the commonplace but woefully misguided?view has so often been that the market's?technology?vendors are wealthy (or desperate) enough to undertake complex, costly and commercially risky integrations to market initiatives without any commercial justification. That conceit has been disproven time and time again in the market's modernisation history, where vendors almost universally have not been willing or able to engage on their own account.
And for obvious reasons - they are businesses and have profit and loss accounts to balance and shareholders keep happy.??They also have demanding clients spending good money with them and who, somewhat inevitably, prefer to be given due priority in development schedules.
Given sufficient commercial incentive and support, of course technologists will be happy to engage with the market's masterplans.??This means there must be a reasonable expectation that their investment will reap a return.??And return does not mean simply PR; few, if any, can possibly divert cash and resources into speculative projects simply for the privilege of looking good in front of their customers and prospects.
It is absolutely essential that Future at Lloyd’s recognises the value of technology vendors as enablers of change.
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Working in close partnership with them will help ensure the market-wide implementation of complex systems enhancements at the scale the initiative needs to create?an integrated, digital marketplace.??Scale is key and this approach is so much better than waiting for the myriad market participants, who all march at very different speeds, to engage with their vendors individually.??This is, after all, how other markets and industries have implemented these sorts of large-scale change programmes.
Once upon a time, the London market did not need technology but that was when Charles Dickens was young.??Nowadays the market is absolutely dependent on it for almost every aspect of its business.??And, to remain competitive, and become an integrated, digital market, it is likely to become even more dependent on it.
It is therefore time to stop thinking of technology vendors as Oliver Twist.??Or, for that matter, John D. Rockefeller.??They are neither.??They are just businesses, like every other market firm.
“If you build it, they will come” may have worked in the movies but it doesn’t work here.??
The market must instead work in close partnership with its vendors, engage them at the earliest opportunity in any initiative, welcome their experience, heed their advice and provide them with a sound, commercial incentive to help ensure the market’s ambitions are realised.
Failure to do this will almost certainly guarantee that they will not come.? And, as I said earlier, if they are not recognised and incentivised then, once again the ambition of the market will not be achieved.
? Jeff Ward, 2022
Jeff Ward is a Director of Datum Point Consulting
#data #lloydsoflondon #brokers #insurance #MGA #insurtech #insuretech #innovation #digitaltransformation #datamodel
Vice President & Head of UK Insurance CGI
3 年Great article Jeff. The approach of all parties (Client and vendor) being focussed from the very beginning on a collaborative successful outcome with a win win is the key to successful programmes. I have worked for leading SI's and all of them had an overarching goal to provide a great job for their clients at a fair price and fair margin. Adversarial behaviour combined with an assumption that vendors are there to shoulder at their cost all risk irrespective of client lack of transparency leads to programme failure and a lose lose for all concerned. Luckily I think those attitudes are changing and we are seeing increasing partnering behaviours with an appreciation that 'together we succeed'. Working for an organisation that has successfully delivered some of the UK's most complex challenging programmes (Smart meters risk exchange, Open banking etc) we understand the importance of partnering behaviours,. We are currently working on several innovative Insurance initiatives with multiple Insurance / broking organisations who are contributing to the future success of the platforms we are building through leaning in with expertise, time and funding which benefits not just them but other Industry participants in the future.
Leading digital to deliver specialist insurance solutions to our brokers and clients.
3 年Jeff Ward agree the market could benefit from a more aligned technology ecosystem where the value it delivers can be realized by all. There seems to be systemic barriers to achieving this, as I know many have worked hard for many years toward this end. What do you think the barriers are? Is it fear, legacy, leadership, commercial acumen….
Helping the insurance industry find competitive edge in an ever shifting disrupted digital world, working at CGI.
3 年Spot on as ever Jeff. I’ve worked for all sizes of vendors and systems integrators from start-up to global organisations, and it is a commercial decision all the way, right from the decision on whether to bid or not. At CGI we take a balanced view across our three stakeholders, our clients (can we add value), our shareholders (is it commercially sound) and our members (is it right for our staff). If any one of those is out of balance we won’t take on the project. This isn’t just lip service, we have to take a holistic view to build value and create a place our members want to work in the long term. And so while I totally agree that there has to be a commercially sound reason for doing the project, I’d also say that the relationship with the vendor needs to be treated as a true partnership not purely a business transaction. If it is too commercially focused, if one side is being squeezed too much, then this creates problems for later. If the goals of the project can be aligned on both sides to deliver value then the chances of success are better. In the same way the best insurers think about what their customer needs, rather than the product they want to sell, the most successful projects create value for both sides.
Founder at Bmbix. Connecting the world's business processes. See bmbix.com.
3 年My own sense of this is that tech vendors enthusiasm for change depends somewhat on what their offering is; product suppliers won't want to be left behind but at the same time, as you point out, aren't likely to be enthusiastic responders to change, where change means cost and risk; service suppliers might perhaps have a more sanguine perspective. I'd be interested to know if the rise of VC backed insuretechs are altering the dynamics of the tech-vendor landscape.