Although everyone agrees that Lloyd's needs to brush up on its ebusiness skills, Lloyd's itself is confused as to how to go about it. And is the international nature of its business really suitable to go 'e'? Roger Foord reports....
The Lloyd's market's main characters are forever telling the market to get its ebusiness act together. Quite right, too. But what is it we should all be doing? Conferences and platitudes are great, but we do not need "smoke and mirrors" solutions. We need to know from people in authority exactly what we in London are supposed to be doing using electronic solutions. The Lloyd's market has always been seen globally as an innovative market and yet technology is being recommended without any clear-cut ideas.
Online internet solutions are working successfully in many industries. Travel and holiday bookings, theatre tickets, electronic banking, book ordering, food ordering and delivery are just some examples. There is a common strand flowing through these services: they are one-to-one (ie. there are not several parties involved).
Insurance is also there, but only for car insurance, house insurance or life insurance. Some direct commercial initiatives are being taken that are innovative, but these are not the answer to the Lloyd's bigger picture.
These electronic systems are easy to understand and use because they have limited and easily documented business rules, which give rise to a price for the product without any manual intervention.
The problem with the Lloyd's insurance market is that it is not one-to-one. In fact in the worst case scenario it could be US client to US retail broker to US wholesale broker to London broker and then to many underwriters. And then of course to international underwriters.
Getting your head round it
Depending on whom you talk to, there is also disagreement about what "electronic" business actually is. Some will say that it is email, some will think that a website with a picture of a chairman and a copy of the accounts from two years ago is good enough. These are only part of the whole picture. Conferences do not help as they again only put up the speakers who are dealing in the easy aspects of ebusiness and not the complications of the Lloyd's subscription market.
The ebusiness solution is littered with confidence tricksters loitering as electronic solutions to which a gullible public has been happy to invest its money. One has the suspicion that at any big drop in the shares of an IT company, the finance director will say to the managing director, "get the PR company to announce a new ecommerce initiative and sit back and watch the shares rise again".
One of the biggest errors in London would be for email to get too much of a stranglehold on business. The unstructured, un-thought out messages, which are now taking hold of London, should be carefully examined, as they are not in any form a perfect result. How many brokers have found it easy to scribble a note on a fax and send it to an out-tray and yet will find it too cumbersome to copy an email, write on it and file it in the appropriate paper file?
The London market is being persuaded to trust trading on email and yet there are many failures in the trusted trading system. Solutions are there for email as companies begin to take the route of managing emails from delivery to electronic file, but also to match with the historic files.
Unless this process is automatic there could be chaos when claims are administered at a later date.
Electronic evolution is likely in many businesses but it needs more than unsubstantiated words from Lloyd's. We all know that "e" is here to stay, but it is a solution in need of a business requirement. Telephones are very efficient, but do not close and sign a deal. Most brokers in London will have ebusiness on their agenda, but are still in the dark about what they should do about it.