LONDON (Reuters) – Lloyd's insurance market of London Ltd (SOLYD.UL) is planning to launch two electronic exchanges next year as part of its three-year reform, he said Monday, and it's trying to achieve competitiveness from low-cost competitors.
PHOTO FILE: Lloyd's Building in London in London City financial district in London, Britain, February 1, 2018. REUTERS / Simon Dawson / File Photo
Lloyd, who is composed of 99 syndicated members and focuses on large commercial insurance, suffered two years of severe losses from natural disasters and there is uncertainty about the British departure from the European Union.
He is moving slowly to process some of his trades online, but there is a lot of business being done personally in the London City of Lloyd's tower.
If the processes were simplified and automated it could reduce the cost of doing business by Lloyd to 25-30% of premium income, compared to 40% current, he said.
“We want to take a step in the right direction,” said Lloyd's chief executive, John Neal, with Reuters, adding that the initial estimates for the costs of the changes were in the “hundreds of millions of pounds” pounds.
One of the new electronic exchanges will focus on simpler risks and the other on more complex risks, with “early buildings” in place by December 2020, said Lloyd. Improved technology will be implemented in 2021 and 202.
Lloyd said that he could use surplus funds to pay the changes, raise senior debt or secure business against future income flows, but would not increase the levy he imposes on members.
In an attempt to compete with venues such as Bermuda, Lloyd is trying to attract participants who offer insurance-linked securities such as disaster bonds.
Also, syndicates have the ability to establish without a physical presence at Lloyd's.
Lloyd said on Monday that the Munich Re reinsurance group, which already has a presence in Lloyd, was establishing the first remote syndicate-in-a-box that will focus on newer areas such as renewable energy. .
Lloyd is also pushing his members to improve their underwriting performance, and Neal said with an event to launch the detailed strategy that the market expects to be below 100% for 2019, reflecting a profit. underwriting.
Some smaller brokers and insurers, who have fought hard in recent years, are concerned that there will be no place for those who have a new look.
“Advocacy should not be effective,” said Simon Matson, CEO of Gallagher UK broker.
“Our role as brokers is, and will always be, an advocate for the customer.”
Christopher Croft, CEO of the London & International Insurance Brokers Association, said, “technology has a role to play… but the value of an intermediary is not at the expense of the intermediary”.
Neal said Lloyd wasn't trying to exclude brokers in his efforts to streamline the market but wanted to get their input.
“We want to bring the brokers to the tour with us.”
Reporting by Carolyn Cohn; Edited by Jane Merriman and Lisa Shumaker
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