Looking for trends in London insurance market processing data

by John Taylor

It’s that time of year again. Right now, I’m looking at a year’s worth of processing stats for the London Market and considering what trends, if any, we can see. With so much talk about London losing market share, insurtech [insurance technology] disruption, innovative technologies and market relevance, can we inform the debate by examining the data?

First let’s look at the stats (see full infographic here):

Trend 1: Consistent growth

The most obvious trend is that both policy and claims volumes are again showing double-digit increases. This included a 10 per cent increase in premium transactions and a 15 per cent increase in the value of combined Lloyd’s and company accounting transactions; as well as an 11 per cent increase in the volume of claims files submitted and a 14 per cent increase in the volume of claims processed. These increases are in line with what we saw in 2015 and 2016. While there is much talk of the London Market losing share to emerging markets, these statistics show that it is vibrant and growing. Can we attribute this growth in 2017 to an extraordinary natural catastrophe year? Unlikely, for two reasons: (1) the growth is in line with two previous benign catastrophe years; and (2) many of the 2017 claims had not flowed through the market by year’s end. Should we stop worrying about disruptors? No, the growth of the market makes it ever more attractive. We can — and must — recognise the opportunity and do everything we can to modernise before others do it for us.

Trend 2: A flexible processing model integrating humans and robots

The 2017 statistics are not insignificant numbers: for example, £64.7bn in accounting transactions and nearly £1.7bn inward premium transactions. Again, this speaks to the size of the market, but also to the quality of the processing. Growing the workload by 10–15 per cent 3 years running without a corresponding increase in the workforce is a testament to today’s flexible resourcing model — onshore, offshore and robots — backed by technology. With 76 million records stored on the Insurers Market Repository (IMR), 104 million messages handled, and average SLA compliance of 99.71 per cent, processing is flexible and efficient. Since 2017 was the largest natural catastrophe season in 14 years, it’s good to know that with a combination of digital efficiency and human expertise, it’s simply business as usual.

Trend 3: Advances in technology

We are starting to see greater use of technology in the London Market. Robots have been employed in parts of the London Market processing activity for several years now, enabling repetitive processes to be completed accurately in minutes rather than days. And if there’s a problem with the submission, the broker is informed of the rejection instantly — no need to wait for a human to check everything and make contact by phone. These advances are just the beginning of our digital journey. With the use of the Central Services Refresh Programme (CSRP), we’re now accepting e-accounting submissions electronically. These make up a small percentage of the 2017 stats, but will be an increasing proportion in 2018. This is important. Today the market mostly moves at the speed of a human. Increasing adoption of technology will enable policies and claims to be processed at the speed of a computer — inhumanly fast and accurate — with a resulting improvement in customer service.

Trend 4: The data opportunity

It’s only when looking at the aggregate numbers over a year that you start to appreciate the vast amount of data that should be available for interrogation. As we move increasingly from manual to digital, this data will become much more easily accessed and analysed. We need to find ways of making the data accessible to the market so that firms can use it to support their own strategic directions. Data on its own is simply a commodity, offering competitive advantage to those who use it well.

It’s easy to take the core of one’s day job for granted. When you’re processing business day in, day out, you can lose sight of the volumes and complexity involved. That’s why it’s so important to periodically look at what we do with fresh eyes. Not just to think how can we do it better, but also to appreciate the sheer numbers, the pressure and the skill with which our people act on behalf of the market. To our customers, thank you for putting your trust in us. To our employees, thank you for your amazing work and commitment. And to the entire London Market, thank you for the opportunity to help you grow this business every year.


John Taylor headshotJohn Taylor is Account General Manager for London Insurance Market, DXC Technology. He is responsible for ensuring the successful modernisation of the London Insurance Market for DXC Technology and its joint ventures with Lloyd’s, the Lloyd’s Market Association (LMA) and the International Underwriting Association of London (IUA).

Comments

  1. Satish Chandar says:

    Hi John, Quite a succinct and neat summary. While your conclusions are great, I will be curious to also see any views on the changing nature of Insurance Product Offerings, Pricing strategies as well as Claims processing value chain. Digital and raft of emerging technologies impacts not just transaction processing, but all the industries that are being insured as well. How are the digital trends in other industries being reflected in the underwriting and claims processes and product offerings? Any comments or trends you are able to observe will be great.
    cheers, Satish (DxC Consulting, Australia)

    Liked by 1 person

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