ANALYSIS: Neal and Rigby outline key Future of Lloyd’s delivery details
As Lloyd’s of London launched its new Future of Lloyd’s Blueprint website today (February 26) to keep stakeholders in the loop, chief executive officer John Neal and Jennifer Rigby, chief operating officer and executive sponsor of the Future at Lloyd’s, highlighted the achievements so far and priorities for 2020 and beyond.
Neal said that the pre-phase 1 transition period that began on October 1, 2019, had been “about getting that document off the page and converting it into a practicable set of actions for 2020”.
Funding was already in place, he said, as £300 million was secured through senior debt, “which in addition to reserves give us £400 million to be able to finance whatever investments we need to make. That doesn’t mean we think it will cost £400 million”, Neal added.
Neal said Lloyds had had “practical discussions” with some of its existing partners . For example Lloyd’s has taken 40 percent stake in PPL as the platform will play an important role going forward. He also said that the organisation had engaged with DXC in terms of legacy bureau connections and how that legacy can be dealt with as part of the future of Lloyd’s.
“We’ve also looked pretty carefully at our own resourcing and skills capabilities need to look like to support the development of the activities that we’re about to embark on and who our key partners should be in that process,” Neal said.
“We had an engaged dialogue with the marketplace about what they really want us to do and what they truly think is important for 2020. In some respects that has seen the market itself take the lead on some of the activities. So when we talk about modernising syndication of risk and the concept of ‘lead/follow’ it is led by the Lloyd’s Market Association itself.”
Neal said that claims sit very much at the forefront of Lloyd’s is doing. “The market has really taken hold of claims activity and sometimes process reengineering with some gusto.” He also highlighted the key role of advisory boards and executive sponsors in ensuring market engagement with modernisation plans.
Rigby explained that today’s progress announcement was about coming out of the transition planning phase, which she said “was all about making sure we’d done all the preparation we needed to do to start on our phase one execution.”
She said that the main areas of executive at an overall level were governance, finance, people and partners.
“We have tailored Lloyd’s own governance to enable us to have that strong governance all the way up to the top to council. Around that we have created the technology and transformation committee, which means we have a sub committee giving a huge amount of time and attention to the programme and reporting that up through to council.”
Having the finance in place to proceed had also been vital she said, as was having the right people in place. “We now have market leads for each of the solutions. We have new recruits from the market and beyond to make sure we have the right talent in place and corporation people that have transferred into the programme as well.
“Partners is another important piece to this as we can’t do it all on our own. They help us with the delivery and this engagement is continued all the way through and is built into the governance and delivery. This has helped us prioritise what we’re doing.”
The Future of Lloyd’s Blueprint website, which went live today, “has 2020 priorities that the market has told us are very very important to them”, she added, referring to them “the three plus three”.
The first three priorities are about market impact in 2020. “The market said we really need the most value in 2020, and those are in terms of complex risk, that next generation of PPL. “In terms of our risk exchange for the future and digitising the component solutions that will plug into that risk exchange and the third one is claims that will deliver quick value to the market in terms of process reengineering and other things will build towards a new claims platform.”
Underpinning these activities are three foundational priorities.
“First, it’s the data and tech, which provides all standards and infrastructure to make the integration of all the solutions work to make this a plug and play ecosystem for the future. This will then let us add other value added services and other components into that infrastructure.
“There’s ‘lead/follow’, which is an important foundation activity which is led by the LMA, which potentially impacts future business models, and then feeds into solutions.
“And third, there is ‘middle and back office’, which Lloyd’s hasn’t talked about before.”
Rigby explained that the Blueprint talked about modernising things like accounting and settlement to really make automation work in the future solutions.
“The market has said we think this is really important, all those middle and back office functions, we want them to be efficient, streamlined and digital. So we’ve stood up a new workstream around that.”
Asked about progress on Lloyd’s syndicate in a box, Neal said there are currently four that “would go through the system reasonably quickly.”
He said Lloyd’s had been “pleasantly surprised by the interest” and that applicants that fit into the box have a commitment from Lloyd’s to get them up in 90 days.
