The London Market’s approach to data and information sharing means that there is “huge potential for error,” according to the CEO of a data monitoring firm that works with a number of major insurers.
“The London Market is quite archaic,” Nick Mair, CEO and co-founder of Atticus DQPro, whose clients include Brit, Tokio Marine Kiln and Markel, told Insurance Business.
Under current systems, data may originate with a broker “thousands of miles away,” passing through multiple parties before it hits the carriers’ systems, Mair explained.
“In an ideal world you would have straight-through processing and clear standards for that data to be transported from A to B, then it would be a much smoother process. But it’s not. Instead what we have…is email, and even fax in some cases, and each party re-keying that data manually, quite often. So there’s huge potential for error in that process,” the CEO said.
“That can’t be a sustainable model for the future, which is why initiatives like the London Market Target Operating Model (LM TOM) are starting to build a future operating model to support an electronic world.”
Lloyd’s last week revealed plans to mandate for the use of the electronic placing platform PPL, with its CEO Inga Beale stating that take-up was “not happening fast enough.”
“You’ve got 320 years of legacy process to try and unwind, and I don’t think that’s going to happen overnight,” Mair said of the slow shift towards PPL usage.
“It has to happen incrementally. The direction of travel has been set in terms of moving forward, and it is moving forward – it could always be faster, but there are always issues that need to be addressed as part of that, and you need to take people with you. That’s what I think [Lloyd’s] are doing at the moment.”
The push for modernisation in the market is vital, according to the CEO, who likened insurance’s legacy system foundation to the London road network.
“You’d never build it that way now, and you’d really like to knock it down and build it all again – but you can’t because those flows have evolved over 320 years,” he said. “So, you have to fix it gradually, in parts. It’s about incremental change – you have to work out where the issues are and address those. And that’s really what the LM TOM is doing from a data perspective.”
Overall, while there is a still a great deal of work to be done, progress has been made, Mair said.
“If you compare where the market was even five years ago, huge strides have been made and the momentum is there now, but there’s always more to do,” he commented.
