The man charged with delivering Lloyd’s six transformation initiatives talks exclusively to Insurance Times

The man tasked with delivering the six initiatives that are set to define the future of the world’s oldest insurance market has urged brokers to play their part.

Peter Montanaro, Lloyd’s new chief solutions owner, is the man responsible for overseeing the delivery of the six initiatives that have been spelt out in the Lloyd’s prospective for the future.

The prospective, launched in May has undergone a lengthy consultation period but Montanaro said there is still time for brokers and underwriters to have their say.

Each of the six core initiatives have their own dedicated solution owners and teams and Montanaro’s role is to ensure that the work to deliver them is co-ordinated and meets with the market’s aims.

The six initiatives are:

  • A risk exchange to handle less complex risks where the products can be utilised by brokers quickly
  • A new system to encourage new capital to better access the market
  • The ability for capital providers and underwriters to create a Syndicate-in-a-Box, to bring new products and business into the market
  • A complex risk platform that makes doing business easier and enables efficient digital placement of the most difficult-to-cover risks
  • A next generation electronic claims service to drive efficiencies and speed claims payments
  • An ecosystem of services that helps all market participants develop new business and provide outstanding service to their customers

Speaking to Insurance Times in the Lloyd’s Lab on the fourth floor of the market’s iconic Lime Street building, now a hive of activity as the teams work on the delivery of the projects, Montanaro said the implementation of the plan for the future will change the market.

“I have been working at Lloyd’s for 15 years and during that time the market has changed and will continue to do so,” he said. “It is a very exciting time for all at Lloyd’s and we have been really pleased with the response from the market.”

The six new initiatives were drawn up after an extensive consultation with the market, and following their publication Lloyd’s has been consulting with not only the London market but also internationally to obtain feedback on how well the plans have been received.

It has generated 4,000 responses, 500 online and there have been 600 people interviewed face to face.

“From the outset the six initiatives were as a result of the discussions we had but it was made quite clear that when we launched the prospectus that if the market had issues with any of the six, we would revise the plans where necessary,” said Montanaro.

Online exchange welcomed by brokers

For many, the launch of the online exchange for non-complex risks was seen to be the most controversial of the six schemes, but Montanaro said the plan has been welcomed by the vast majority.

“We expected that there may well be some response from brokers to the plan, which was never designed to disintermediate the market,” he added. “The aim of the exchange is to reduce the level of admin brokers have to undertake and in effect free brokers to deliver value-added services to their clients.

“We have engaged with brokers and our message has been clear. We want them to become involved and play a part in how we shape the initiatives, so they benefit all areas of the market and the clients. We have engaged with Biba because we believe that the exchange will provide opportunities for brokers.”

Indeed, Montanaro said they are still happy to speak with brokers and he is hoping that more will contact the market to discuss the initiatives and how they will work for them.

“The consultation period is now over but it does not mean we are not keen to talk to brokers,” he explained. “We are holding a series of events at the Lloyd’s Lab on each Wednesday in August to highlight where we are, and we would welcome brokers who are interested to register to come to those events and also to talk to us about their views on our plans.”

Claims are the industry’s ‘shop window’

When asked which of the six does he think is the most important, while all will change the market for the better, he said the claims initiative has to be at the top of his personal pile.

“Claims is the shop window for the industry,” he stated. “It is what we are here for.

“We as a market have a long and proud history when it comes to claims payment, going back to the San Francisco earthquake and Cuthbert Heath.

“But this is not simply about paying claims faster. It is not all about speed. It is about delivering an enhanced service to our clients and with it raising their expectations on the response they expect from the market when they have a claim.

“If you lose your house in a hurricane or a flood, while being handed a cheque within days is welcome it is not what you really need at the time.

“You need support services that will ensure that your immediate problems are solved, and going forward you want to work with the market to enhance risk management to prevent the claim actually occurring.”

Encouraging new capital

Montanaro added the plans to encourage new capital are also important.

“We are seeking ways to make it easier for capital to come into the market to support the underwriting of new risks,” he said. “What we do not want is for capital to arrive to compete for the risks we currently write but for capital to be able to quickly access the market to make the most of new opportunities and also for investors to have a clear path to remove capital as they want to.

“The plans for the creation of the syndicate-in-a-box are very much linked to our aim to make it easy for capital to access the market if they have an opportunity or a risk that we do not already meet.”

While Lloyd’s continues to work towards the 30 September deadline when the final plans will be announced and the progress across the initiatives will be revealed, Montanaro said that the wider market needs to grasp the opportunity to play a part.

“We are really keen to continue to engage with the market and brokers in particular. If you have an opinion we would like to hear it and if you want to shape the future of the market the opportunity is here to engage with us.”

While the plans are grounded in technology, Montanaro said the aim is not to dictate the way in which brokers and underwriters access and communicate with the market.

“What we are not looking to do is say ’this is the system you must use it’,” he added. “The aim is to provide the ability for firms to plug in to what we are offering via their own systems. We want to reduce inefficiency and the cost of doing business.”