 By Richard Clark, Head of Business Development & Specialist Commercial at Xuber
Nothing like a bit of Botox
If the amount of scaffolding, hard hats and fluorescent jackets are anything to go by, London EC3 is undergoing a face-lift the likes of which hasn’t been seen since Barry Manilow last went under the knife.
So whilst the streets of our infamous Square Mile are architecturally overhauled, what about the operationswhich sit behind the facades? As any ‘A’ list celeb would tell you, it’sone thing to look great on the exterior, quite another to be fully functioning on the inside.
In this article, we’ll take a quick look at what’s happened in London over the last year and explore seven specific trends you might expect to see in 2014 as (re)insurers look to better improve their processes and engage with their customers.
So what’s changed?
With 320 years of history behind it, the London insurance market is one of the oldest industries around and is still underpinned by original trading ethics of uberrima fides and solid face-to-face relationships. However, be it technologically, culturally or geographically, the winds of change are starting to blow through the streets of London.
• The global stage
London (re)insurance businesses are realising the importance of not behaving as isolated units. The gates to London are being pushed open – with not only London insurers raisingtheir game internationally, but also as global businesses set up more operations in London. And as awareness of the need for different cultural practices and local requirements becomes more acute, so does the need for a seamlessly integratedchain of cross-border operations.
• Defining the customer
There has also been a realisation that the sweet smell of ‘customer-centricity’ is about more than the carrier and the broker alone –relationships with the insured or reinsuredare increasingly being recognised as pivotal to success, and the market is making moves to facilitate better interactions and information sharing between them.
• Legacy is a rude word
Apparent from seminars, roundtables and conferences – the London market- and the vendors that supply it - are finally redefining the word ‘legacy’. Existing systems aren’t necessarily bad – indeed most of them work just fine – they just stop you being better. And in defining what ‘better’ looks like, firms are now making the strategic decision to modernise or not.
• The resurgence of end-to-end
The benefits of end-to-end systems (as opposed to componentised) are even more acute in the London market due to its specialisation and growing global reach. P&C underwriters in London get involved in many more areas of the business than their counterparts in personal lines – so require a more holistic view of processes including claims, policies and outward protections– demands that are reinforcing the need for tightly coupled systems that use a single source of data.
7 trends to watch out for in London in 2014
There’s no doubt that London is a vibrant and growing market, holding an exclusive draw for many. But to maintain its edge as the ‘market of choice for complex risk’,businesses will need to up-the-pace of change. And here’s how this could pan out:
1. The art of the possible
Many are locked into ‘today’, afraid of shaping tomorrow or even unaware of what it could look like. With strategic business plan in hand, firms will need to examine which areas of their systems are not fit for (tomorrow’s) purpose i.e. hindering their ability to gain efficiencies or to respond in a timely way to market demands. A solid and quantifiable business case that predicts the potential with modernisation should ensue, and this activity needs involve the whole board by the way, not just the CIO.
2. Mobility
Firms will invest in technologies that are going to support and enhance face-to-face trading, giving their people information on the move and the power to use their skills to the maximum, wherever they are. Cut-down mobile apps won’t suffice in the complex London market –a true window into core systems will. But this leap is only possible when the underlying systems are ready to serve up the relevant intelligence to the right people.
3. Analytics
Since London deals with exceptions to the rule–firms are sitting on a uniquely valuable mine of data. How this complex data is harnessed and turned into realisable advantage is an ongoing challenge for many. Industry analysts have recently noted that those with structured data management programs will lead over those that don’t, so technologies that enable the integration and farming of data - giving people a real-time, consolidated picture of what’s going on– are sure to become a key differentiator.
4. Consider new blood
The flip-side to an industry steeped in history is that it can stifle change. Some of the greatest advancements in the London market have been achieved when an agent for change has rocked the boat – someone who can create a culture for change that encompasses the entire matrix of employees, brokers, shareholders and reinsurers. Watch out for new senior appointments.
5. The pain barrier
Automation is literally on every RFP / RFI, yet granular process automation from a predominantly paper-based system is nigh on impossible. Sadly it’s time to wake up and smell the barrister-made-coffee – automation is only going to be possible through the digitalisation of information, which also means firmswill be promoting the importance of standardised data capture in readiness for the future.
6. May the force be with you
The London market has used the ‘power of the collective’ for hundreds of years, so why should the future be any different?Firms will become more active in driving change together, sharing the cost ofcentral services such R&D to fuel new initiatives like Big Data and Telematics. Spearheading innovation with others could gain momentum for those unafraid to share their common goals and assets in return for a greater yield.
7. Change to progress, don’t progress to change
If nirvana looks like a business environment that eats new regulations like Solvency II for breakfast, or helps firms to add new lines of business in a matter of hours rather than months – then firms will get clever with highly configurable technology that addresses change as an on-going process as opposed to a series of ‘fix-it’ challenges.
Above all – as we gallop headlong into another year –firms will need to be creative, but remain pragmatic to avoid blind avenues. Any modernisation initiatives undertaken needto do one of two things - make it easier for your people to do business - or for people to do business with you. Ideally both.
So if you’re lucky enough to be moving into a new building in the Square Mile, or even if you aren’t, just remember - it’s what goes on inside your four walls that will make the City’s lights shine even brighter.
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