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Digitising insurance – companies must stay focused on Blueprint Two to keep their edge

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Blueprint Two is a ground-breaking Lloyd’s programme aiming to digitise the London insurance market. It will require insurance companies to make significant changes that they cannot afford to get wrong.

Following the effects of Covid on the London insurance market, Lloyd’s has changed the focus of its Blueprint One, which looked at individual workstreams, towards more integrated digitisation including in solutions for cover holders; claims process improvements; and developing a modern placing platform (PPL).

A divergence of implementation effort led Lloyd’s to shift its strategy towards how the siloed workstreams outlined in Blueprint One can integrate and work together. This will allow London insurance market operations involving risk placement, accounting, and claims settlements to become better, faster and more cost-effective. It will bring better outcomes for all market participants, from consumers to large syndicates.

Insurance market modernisation requires centralised data creation and storage, and clear and concise data standards, so the information can be validated, reported and routed.

Blueprint Two will focus on five workstreams – a single engagement team; vendor-aligned grouping; producing key artefacts; monitoring digital adoption; and additional focused support. These workstreams will adopt two approaches – full digital adoption, and transitional services. In each, the market will be tasked with changing procedures, systems, and culture.

Linking customer journeys

Lloyd’s has prioritised the two most common customer journeys in the London market – open market and delegated authority – which constitute 80% of market premium and up to 90% of contracts placed at Lloyd’s.

These paths divide further into two transactional sections:

  • Getting cover – digital solutions for placing new business, endorsements, and renewals
  • Loss recovery – solutions for claims notification and loss adjusting.

Both will rely hugely on the ability to design and implement a flexible, digital infrastructure – currently comprising a Data Store and a Digital Spine – to link the two sections in these customer journeys.

For the open market ‘getting covered’ initiatives, Lloyd’s will set data standards to which market and vendors must adhere. The development of their own PPL system is on the backburner, but there are still plans to introduce it in future.

A ‘core data record’ (CDR) will be introduced to standardise placement data, and act as a single point of truth for other market processes such as claims, renewals and payments. Further digital tools will be rolled out to supplement the digitised placement service, including revised market reform contracts (MRC v3) and a digital gateway that can store the CDR.

The introduction of digital onboarding services via delegated contract oversight manager (DCOM), including digital binder registration and access to trading platforms, will provide significant digital tools to cover holders.

Instant data validation

Lloyd’s intends to introduce electronic first notification of loss (eFNOL), which will link with CDR to allow instant data validation. It will also provide a workflow for triage procedures and further tools to aid claims adjudication. eFNOL will ultimately replace the ECF and CLASS systems currently used for open market claims.

Lloyd’s will continue to work closely with delegated claims administrators (DCAs) to provide digital tools that improve the accuracy and efficiency of their processes. This is evident by the release of DCOM, Claims Bordereaux status tracker pilot, and Faster Claims Payment (FCP), which will use the Vitesse payment platform to allow DCAs to shorten the claims payment cycle, thus improving the service to consumers.

Some of these initiatives have been delayed. But on 2 December 2022, Lloyd’s announced that London market technology partners, such as DXC, will support the digital solutions in Blueprint Two. The cost of the market-wide transformation has been quoted at £300 million, which had been raised via debt accrued in 2020.

How to prepare for Blueprint Two

The advice for market participants is to have a clear engagement strategy to comply with the impending standards. This includes a digitised operating model, and investing or consolidating technology that will be compatible with the Blueprint Two changes.

Insurance firms must deal with various long-term activities and challenges, but they cannot afford to let their focus drift away from the new requirements in Blueprint Two. Only those who implement a progressive strategy and operating model will reap the long-term benefits of digital transition.

How Delta Capita can help

Delta Capita understand these changes and can help you transform digitally to meet the impending requirements. We currently work with early market adopters of Blueprint Two, enabling us to offer expert insights. Our dedicated team have a wealth of skills and experience in the London market.

DC can help you define current and future business operating models through our experienced business process transformation consultancy. We can help you manage communications between technology firms in the market, and offer resources to help you ensure timely delivery of changes. We also provide professional delivery assurance oversight.

This support allows you to stay focused on business-as-usual, and save time and costs.

Contact us to find out more and speak to one of our experts.

This article was co-authored by Mike Booker, Consultant, at Delta Capita.