Lloyd's of London - 'Time to Take Back Ownership of the Central Bureau' - Insurance Day 19th July 2019

The new ‘The Future at Lloyd’s’ plan from the latest management cannot be considered an original concept. Many previous Lloyd’s chairmen and CEOs have had good endeavours in the past but have been thwarted by the market itself. Only Sir David Rowland can be considered to have genuinely achieved something in the 1990s.

With doom and gloom over recent massive losses, the need for new technology (but what?) and with Brexit still unresolved, the need for new ideas cannot be denied. The current business climate means it cannot be too soon.

Technologies that insurtech gets excited about are geared towards general insurance – with its large volumes of similar, fixed formatted transactions - rather than the subscription-based wholesale insurance and reinsurance market. Getting the same electronic results from the Lloyd’s transaction is a completely different kettle of fish.

What is important is to have some form of central technology solutions which are specific to Lloyd’s and the London market players. The Lloyd’s Lab is set up to provide bright young technology solution providers a platform to persuade the London market that they have some bright ideas which will benefit the London market. Maybe this is true, but generally carriers based in the Lloyd’s market look for solutions which give them an advantage over their competitors not something to be shared by everybody.

One area of the London market which gives a general benefit to all was the central bureau, which until 1999 was run by and for the London market. Some people called it a “jewel in the crown” as all of the centralised systems that the London market was happy to share, such as central accounting, electronic claims and central documents, were in one place with a management team that provided the ideas and implemented them after consultation and costing.

The sell-off of this bit of ‘family jewellery’ to Xchanging was a massive mistake and ever since has meant that any ideas which would benefit the London market as a whole have only been realised if the private bureau owners could make a profit from it. This is not necessarily their fault but has meant that needed and desired centralised changes have been non- existent for many years. The innovative ideas that could have been implemented centrally have had to rely upon an outside ‘for profit only’ organisation. The electronic platform PPL is a perfect case - although again it isn’t the technology owner Ebix’s fault; they need to make a profit for their owners.

The Future at Lloyd’s plans make no mention of this idea of buying back and controlling the ‘heart beat’ of the London market, but it could and would be welcome. The cost over the years of the many market initiatives which have come to nothing would have paid for a buy-out many times over and London would have its own system for electronic solutions for the good of London and its global clients.

It isn’t too late to put the market’s hand in its pocket and run its own IT system and changes. Surely the Lloyd’s market is big enough to run its own business?