.Lloyd’s and insurers in the London company market have formed a joint venture with DXC Technology, aiming to transform digital capabilities and reduce processing costs for the London insurance markets
The joint venture intends to “deliver both world-class technology as well as significantly reducing the processing costs for the market,” said Lloyd’s in a statement.
Lloyd’s higher cost of insuring risk has long been a competitive issue for the market, although progress is being made. Lloyd’s 2020 expense ratio was 37.2%, compared to 38.7% in 2019, although most competitors have expense ratios of around 30%.
In a prospectus published in May 2019 for the Future at Lloyd’s project, Lloyd’s said it wanted to cut acquisition and administration costs for the most common risks from 30-40% to 10-20%. A time frame for this reduction was not provided. Essential to Lloyd’s cost reduction program is its ongoing work to modernize systems and processes.
Signatories of the new joint venture are Lloyd’s; the Lloyd’s Market Association (LMA), which represents 51 Lloyd’s managing agencies and Lloyd’s members agents; the International Underwriting Association (IUA), which is the trade body representing London commercial insurers outside Lloyd’s, and, of course, DXC Technology.
The parties confirmed that this new arrangement followed many months of discussion, product development and early solution workshops that will provide accuracy, speed and processing power to the London insurance markets. The new technology and digital processing capabilities will support the ambition to allow a customer to get cover more quickly and support faster claims payments.
John Neal, CEO of Lloyd’s said this agreement demonstrates a clear commitment to achieving Lloyd’s ambition “to build the most advanced insurance marketplace in the world,” which is the goal of its Future at Lloyd’s project.
“DXC has laid strong foundations which will enable us to deliver the infrastructure required to support the digital marketplace of the future and ensure that we get it right first time and at a process speed not previously seen in the market,” said Neal in a statement. “I am delighted by the progress made so far and look forward to working together with the IUA and LMA to create the digital services that the London market can depend on for years ahead.”
Sheila Cameron, CEO of the LMA, commented: “Our shared goal is a digital marketplace enabled by a digital back office as its engine room. Managing agents look forward to working in partnership with Lloyd’s, DXC and [the] wider London market to deliver our shared vision over the coming years.”
Dave Matcham, CEO of the IUA, said the joint venture “will enable a vital digital transformation of central processing services.”
“The continuation of our work contributes to the far-reaching transformation of the London insurance market, advancing the market’s ability to service complex risks,” said Mike Salvino, president and CEO, Tysons, Va.-based DXC Technology. “Our collaboration with Lloyd’s is characteristic of the ‘new DXC’, and our focus on delivering excellence to our customers and our customers’ customers. Drawing upon our capabilities across the Enterprise Technology Stack, we will continue to deliver the right technology to support the London insurance market’s progress towards a growth-driven, digital economy.”
Sourced from Insurance Journal - written by LS Howard