Brokers must be won over for LMG’s TOM to succeed
Xuber, Xchanging’s insurance software business which delivers solutions to the commercial insurance, health insurance and reinsurance marketplaces, has said that the long-term success of the London Market’s Target Operating Model (TOM) depends on winning over brokers and carriers across the whole London insurance market.
The statement emerged at an industry round table of experts involved in driving forward the reforms organised by Xuber.
The round table heard that if TOM is a success, it will play an important role in helping to safeguard the future of the London Market.
As a key component of the London Market Group’s (LMG) modernisation programme for Lloyd’s and the company market, the TOM focuses on developing electronic data capture through a centralised services hub. It aims to deliver standardised processes and shared facilities in non-competitive areas of business.
Last week, the LMG steering group prioritised three key TOM initiatives during 2016: Placing Platform Limited (PPL), Central Services Refresh Programme (CSRP) and Delegated Authorities. The TOM ‘blueprint’ is also expected to be completed in June 2016.
However, participants warned that the market as a whole must be assured the TOM’s aims are aligned to those of the seminal London Matters report, published in November 2014 by the LMG and Boston Consulting Group.
This widely-read paper warned of the imminent need for the London Market to become a more efficient, straightforward place in which to do business, if it is to protect its position as the world’s dominant insurance and reinsurance hub.
Attendees at the roundtable included executive level members of the London market from underwriters and brokers including Peter Mungeam, Aon Benfield Asia Pacific and UK chief operating officer, who said the TOM is linked to the wider goals of “stopping erosion in the London Market and making it an easier place to do business”. This could mean the removal of market-specific practices, or so-called ‘Londonisms’, which can negatively distinguish it from other markets.
Strong leadership, focus and a clear strategy for involving and communicating with the wider market are all key to ensure TOM succeeds, according to the roundtable participants. The participants were also keen to point out that by keeping to these objectives, the TOM will overcome some of the problems associated with past projects to modernise the London Market’s back-office systems.
“With previous attempts, the London Market has always tried to build the silver bullet,” said Phil Race, Xuber’s chief sales and marketing officer.
“The TOM is being undertaken differently with its multiple project streams and, therefore, has a much better chance of success.”
The tone of the discussion was broadly optimistic that the TOM initiative has the momentum to drive the necessary changes to the London Market’s processes and practices. However, there was also cautious recognition of the difficulties to achieve the necessary pace of adoption through consensus and committee.
Steve Reid, business strategy director at Xuber, said: “Those of us who have been involved in driving forward the TOM project have cause to be optimistic based on the input from the wider market that we have already seen.
“With a transparent and strong approach to communicating with the market, the LMG has been able to successfully engage with those brokers and underwriters for whom this will be critical in the long term.”
Reid also said that service providers, too, have a role to play in the successful implementation of the TOM by supporting the market through thought leadership, advice and support regarding each of the component parts of the overall project.
