Viewpoint: Digitally streamlining the coverholder market
Automation and the ongoing digitalisation of policy administration, underwriting, claims management and reporting are enabling Lloyd’s and its coverholders to streamline operations, reduce manual work, improve efficiency and enhance the overall customer experience
Technology is changing the way delegated authority business is handled at Lloyd’s and certain innovations are crucial for the industry’s survival
There is no denying delegated authority is an important business stream at Lloyd’s.
As well as helping Lloyd’s process large numbers of policies and access a broader customer base, by working with coverholders who specialise in specific industry sectors or geographic regions Lloyd’s can spread its exposure across a wide range of risks, which helps mitigate the impact of large losses in any one area.
But this is not all the delegated authority space has to offer. Coverholders often possess specialised knowledge and experience in niche markets, the insights of which can lead to new products, improved risk assessment and even more efficient processes.
And the benefits do not stop there. Coverholders are known for having established relationships with local clients and distribution networks, a key attribute for anyone wishing to expand into new territories.
Central to all this is, of course, technology: the foundation for innovation and the key to industry survival. Over the past decade, technological advancements have helped transform the coverholder market, from innovations including digital platforms that enable tailored products and solutions, to advanced data analytics and risk assessment models that can accurately price policies. Without doubt, technology is helping the sector develop into one that is competitive, communicative, transparent and, above all, efficient.
The digital toolkit
With more recent advancements focused on improving operational efficiency and addressing emerging risks, technology is arguably transforming the way delegated authority business is handled at Lloyd’s for the better. Automation and the ongoing digitalisation of policy administration, underwriting, claims management and reporting are enabling Lloyd’s and its coverholders to streamline operations, reduce manual work, improve efficiency and enhance the overall customer experience.
The rise of artificial intelligence (AI) and machine learning have further improved processes. Advanced data analytics techniques, for example, have enabled Lloyd’s to analyse vast amounts of data from multiple sources, meaning patterns, trends and risks can be identified. Then there are digital system reports, which provide access to valuable insights into performance, risk exposure, claims trends and profitability. As a result, Lloyd’s and its coverholders are delivering improved underwriting decisions, portfolio optimisation and more strategic planning.
Technological advancements have helped transform the coverholder market, from innovations including digital platforms that enable tailored products and solutions, to advanced data analytics and risk assessment models that can accurately price policies
The rise of online platforms has also played a hand in this digital transformation. As well as enabling automated compliance checks and monitoring adherence to regulatory requirements, online platforms, portals and data exchange systems allow real-time information sharing, collaboration and communication between Lloyd’s, coverholders and other stakeholders, the result of which is improved transparency, speed and accuracy of delegated authority transactions.
Naturally, at the heart of all these technologies is data; it is the driving force behind every command, action and outcome. Without it, AI cannot function, machines cannot learn and even automation cannot take place.
These three technologies in particular are behind our very own technology, Graphene, a post-bind analytics and pricing platform that employs the latest data processing and analysis techniques. Its powerful modelling engine is driven by machine learning and AI, which allows users to capture unique insights at binder, coverholder, territory or class of business level.
But importantly, Graphene allows for the demonstration of insurance data, with the platform and its conclusions being shared with coverholders, brokers, fellow markets and reinsurers. And this is where technology is really shaping how delegated authority business is handled at Lloyd’s; it is opening up lines of communication between all contract parties.
For coverholders, brokers and reinsurers, such technological progress is allowing them to move away from traditional linear, mono-directional modes of communication, which in turn is allowing them to gather collective insight to underpin corrective strategies. The outcome of this will be a sector that is more proactive and less reactive when it comes to risk management. In a world of evolving and increasing risks and hazards, surely this is something we should all be striving for.
Nick Tye is chief executive of Carbon Underwriting