It has been a year of momentous change for business – and many markets have been forced to accelerate their digital transformation efforts to overcome and adapt to new ways of operating. Necessity has been a true driver of innovation over the last couple of months, and many businesses are focusing their efforts on a digital-first recovery to prepare for the uncertainty ahead.
But how can the London Market, a 332-year-old body that has historically been built on face-to-face trading and paper-based processes, keep up with this digital acceleration? Unlike its general insurance counterpart, which is already well-established in the digital realm, these businesses have historically been resistant to such change.
Due to the high-value nature of claims, relationships have been built on physical interactions, meaning that even today many traditional processes remain in play. Digital processes put in place during lockdown have sought to simply replace these processes rather than optimise them – and coming out of coronavirus, London Market businesses must look to systems that optimise processes and unlock value. This includes using technology that can be easily integrated with existing systems, to enable brokers to utilise data in a more innovative way.
Overcoming digital apprehension
Recent years have seen an increasing need for modernisation to improve processes and reduce costs, but until now the London Market has approached digital transformation with caution. The perceived failures of some digital projects have caused apprehension within the sector, with many put off by the thought of large-scale initiatives that require copious amounts of time and investment.
Since the beginning of the pandemic, however, there has been a significant shift in attitudes towards digital transformation. London Markets are becoming more open to change, with many using this as an opportunity to accelerate digital trends that would have otherwise taken years to come in to play. Lloyd’s of London CEO John Neal believes that technology should be used to revitalise the marketplace. Late last year he commented: “We need to make ourselves more relevant, more innovative [and] much more cost-effective.”
Adapting existing systems
Whilst a new willingness for change is evident, it is important to recognise that the London Market is built on years of legacy systems – many of which are far too complex and ingrained with data to simply replace overnight.
A recent survey among key players in the London Market revealed that only 40% of the respondents rated their businesses four or five out of five for agility. In essence, around 60% were struggling to handle change. This is staggeringly low when compared to other industries, and where modern Platform as a Service (PaaS) technologies like low-code can play a valuable role. That’s because developments in the field mean that, rather than taking a ‘rip and replace’ approach to digital transformation, business users can build upon and adapt existing business operations easily – no matter their level of technical skill. In this way, low-code enables business users and IT to collaborate on application development, in order to rapidly improve processes without the need for complex code, and helps them mine the wealth of data available.
By doing so, businesses can drive positive results and deliver value from digital projects faster and easier. By removing the need for code, businesses can break down the working silos between business and IT, meaning they are able to utilise a range of experience from across the organisation. These insights help to make process efficiencies work for everyone, rather than just a minority.
This is also particularly useful in merger and acquisition situations, where often a choice needs to be made over what system to keep. Low-code technology can help to smooth this transition by empowering business users to adapt existing systems.
Enhancing relationships through tech
For the London Market, relationship building is everything and, until now, misconceptions around the use of technology replacing the personal touch has held many in the sector back from innovation. By using application platforms that utilise low-code technology, and building better processes than simply just improving efficiencies, businesses in the London market can actually enhance relationships even further. By automating processes that would have otherwise been manual and laborious, brokers can spend that time on higher-value tasks that strengthen existing relationships, and plan for the future.
A forthcoming project from Lloyds Market Association (LMA) is one great example of utilising the technology within the London Market setting. The LMA’s ‘Gemini’ claims expert management solution recently utilised the power of low-code technology to enable carriers to better understand their true spend on claims experts. In turn, this helped the firm manage relationships, whilst also monitoring performance. The project was delivered in just five months – a significant achievement for a London Market project.
Building better systems
The London Market must act now in order to build better systems for the future. Rather than just replicating existing paper-based or physical processes, they must focus on delivering and refining these in a digital format – considering the efficiencies and benefits they stand to gain as a result.
With the previously slow pace of London Market modernisation deemed as detrimental to its survival, a digital-first approach is critical to its future – and businesses must be able to keep pace with changing times. More processes across all sectors are being reimagined as a result of COVID-19, which has driven a new level of remote working. Now is the time for the London Market to reassess its operations and drive greater efficiency both internally and externally – now and in the future.Learn more about low-code