PPL at Lloyd's ‘changing the mindset’ of insurance players
In the last quarter of 2019, Lloyd’s saw a significant spike in the use of the Placing Platform Limited (PPL). The platform enables brokers and insurers to quote and negotiate electronically and taking into account the use of other platforms such as Marketplace and MEL, PPL is evidence that Lloyd’s and the wider London market are embracing the shift to digitisation, also shown by Lloyd’s modernisation progress update (unveiled yesterday February 26).
But Kim Darrington, senior executive of market modernisation, at the International Underwriters Association (IUA) noted that while the platform is an important step, Lloyd’s is still some distance away from complete digitisation.
“Currently the PPL just supports the paper process but what is important, is how the platform is changing the mindset of players in the market. Overall, the growth of these platforms and future digitisation should bring the Lloyd’s and London markets up to speed with the rest of the world,” Darrinton told Intelligent Insurer.
Given that the market place started making concrete plans to implement PPL back in 2014, with the first risk bound in June 2016, change has been gradual. But Darrington noted that rapid and radical change is not something that would resonate well in the Lloyd’s and London markets.
“It is unlikely that change will be delivered rapidly because the London market has a complex ecosystem of relationships,” she said. Darrington added that complete digitisation could actually cut out the human element and for many, human negotiation is a crucial aspect for underwriting complex risks in the London market.
According to Lloyd’s electronic placement mandate, in Q1 2019 all syndicates were required to write at least 40 percent of their risk using a recognised electronic placement system such as PPL, Marketplace and MEL, with a target of 50 percent in Q2. This target has now increased to 80 percent for Q1 2020. IUA companies signed up to PPL, accepted an average of 61 percent of in scope risks, and 42 percent met or exceeded the target of 80 percent or more.
“It is critical for the entire London market to be able to transition itself into the digital era but in order to do this there needs to be a change in market behaviour, attitude, business processes and technical facilities,” concluded Darrington.
