25% of Lloyd’s syndicates miss PPL target

Latest data by the London Market Group (LMG) shows that 24 percent of Lloyd’s syndicates missed the target for electronic placement in the second quarter of 2018.

The Corporation of Lloyd’s has introduced a mandate for electronic placement in March 2018 requiring each syndicate to have written no less than 10 percent of its risks electronically from the end of the second quarter of 2018 through the PPL platform.

Syndicates accepted 16.3 percent of in scope risks through the electronic placement platform PPL between April and June. Around 63 percent of syndicates met or exceeded the target. The highest level of adoption for a syndicate was 54 percent of all in scope risks. Around 24 percent did not reach the 10 percent target and 13 percent reported that they had no in scope risks during the period.

Those that adopt electronic placement in line with the mandate will receive incentives, in recognition of their increased efficiency, Lloyd’s CEO Inga Beale has said. Those that fall short will be required to contribute towards the costs of modernising the market.

The electronic placement mandate is designed to accelerate the market’s transformation from paper to digital and increase efficiency.

"The London market has clearly made a concerted effort to increase their usage of PPL in the last three months, and it is a positive sign that overall the minimum threshold has been exceeded,” said Bronek Masojada, chair of the PPL board. “Inevitably, activity fluctuates with renewals but a nearly 50 percent uplift between May and June is very encouraging,” Masojada added.

The London Market Group plans for PPL rollout of all classes to conclude with reinsurance in the third quarter of 2018.

“It is vital that we make London an easier place to do business with wide spread market usage of an e-placement platform. By highlighting success amongst those businesses that have well-exceeded the targets, we hope to encourage a race to the top. In the second quarter report, we will increase the transparency with league tables of all participants.

“However, focusing on the placement is not enough. We want to get it right, right from the start of the value chain – at submission, and there is still a long way to go on those metrics. If we don’t capture accurate data at the front end of the placement process and then the critical structured data at the end, we will only be doing part of the job we need to do,” Masojada said.

The number of risks bound on the electronic platform exceeded 2,500 in June after below 2,000 in May and just above 2,000 in April. The majority of risks bound through the platform are in financial and political lines followed by property & casualty.

Shirine Khoury-Haq, Lloyd’s chief operating officer commented: “We are encouraged by the support and effort we have received so far which has resulted in the market exceeding the target set earlier in the year. Further adoption will help the market increase efficiency, reduce back office costs and, most importantly, improve client service. We are using the feedback we have received to work with our syndicates, the Associations and our brokers to build on the momentum generated by these positive results.”

Louise Day, director of operations at the International Underwriting Association, said: “This analysis clearly demonstrates that the momentum building around PPL extends widely across all parts of the London Market. Unlike Lloyd’s there is, of course, no mandate for electronic placement in the company sector. IUA members, however, have demonstrated clear support for PPL and are recording some very encouraging rates of adoption.”

Two thirds of IUA companies voluntarily reported their usage. IUA members that disclosed their usage accepted an average of 23 percent of in scope risks electronically while 30 percent did not reach the target.

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