Lloyd’s has opportunity to lead insurtech ‘arms race’

The global reach of Lloyd’s combined with the nimble nature of its carriers means the market has the potential to lead from the front when it comes to gaining advantage from new technologies, a new report has suggested.

A new report, InsurTech-led change in the Lloyd’s Market, was launched at the market’s Insurance3.0 Conference.

The study, undertaken for the LMA by management consultancy Oxbow Partners, praised the work of some Lloyd’s managing agents in developing new propositions and embracing new technology, citing Beazley for its Breach Response cyber product and XL Accelerate’s collaboration with Gatwick Airport and Oxbotica, among others.

The report further highlighted the advantages for Lloyd’s in the InsurTech ‘arms race’. With managing agents being nimbler than large insurance groups, ‘Supplier InsurTechs’ can be deployed quicker. Additionally, managing agents can take ‘Distribution InsurTechs’ global, using Lloyd’s extensive licences and their own relatively simple international management structures.

Other notable findings included the fact that insurtech is now moving beyond personal lines with many new technologies and methodologies having an impact in commercial and specialty insurance.

It also suggested that new data sources could have a transformational impact on underwriting, but would require a major cultural shift from current practices; that the SME insurance value chain is being impacted by the emergence of cloud platforms which could become the ‘gatekeepers’ to customers, like social media in personal lines. It suggested this will impact the sale of specialty insurance products and delegated authority business.

But the report also noted that to take full advantage, managing agents need to make data and digital a board-level agenda point, have a clear vision and implementation plan. They will need to make changes across the organisation, including people, governance and culture.

Tom Payne, director of market operations, LMA said: “InsurTech has moved beyond being viewed as a hostile entrant into Lloyd’s. InsurTech has arrived in the broader commercial and speciality markets – Lloyd’s heartland – and technology-led change will accelerate over the next few years, with innovation through new technology set to become the norm.”

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