The challenges of implementing the changes arising from Blueprint Two in the Delegated Authority space are significant. The ultimate ambition to shift the market to a digital eco system will help firms deliver better value at lower cost for their customers, however, as an industry there is much to do to actually make the ambition a reality. Lloyd’s have recognised the challenges for this initiative based on market feedback, choosing to adopt a phased and rolling adoption programme from Q3 2021 and focussing on market business partners who are ready to adopt the platform.
Strategic choices for legacy systems
Lloyd’s are working on the market technology aspects. They are looking to replace legacy solutions, such as Atlas, BAR, DA SATS and AiMS, with new or enhanced systems, which meet the go-forward needs of our industry. Lloyd’s have provided indicative timeframes for a phased approach and some limited guidance to market participants. Many firms are waiting for further clarity from the technical roadmap due to be issued in April before deciding on their Delegated Authority system strategy. Others have decided not to wait and are pursuing technology solutions, which address their current challenges and helps move them forward in their journey. Both approaches are valid in the current environment, as both recognise the enormity of the task ahead. However, what else can firms do to prepare themselves for the journey ahead and get them to a position to embrace the new DA platform that will be available through Lloyd’s?
The need to assess and improve data quality
Accurate and reliable data capture is at the forefront of the challenge and is what both brokers and managing agencies need to concentrate on. The enhanced solutions offered by Lloyd’s will only be as good as the data going into them and the delegated portfolio is known for its challenges with data quality. Steps have been made by Lloyd’s to improve data integrity such as the Coverholder Reporting Standards v5.2 and the Market Business Glossary and they provide a good basis for what to expect from Lloyd’s.
However, key questions remain for many firms:
Key steps for effective collaboration with all parties in the DA eco-system
With these questions in mind, there are 4 considerations, in the data quality journey, needed to make the DA Eco-system a success for both brokers and managing agencies.
We’re now in a period of transition to a new era of Delegated Authority Management. All market participants must consider how they enhance current operational practices to meet the need of Lloyd’s, as well as improve the quality of data held and shared across the market. Improved data should result in enhanced underwriting decision making which in turn should result in improved underwriting profit.
As a market we know what is coming. During 2022 there will be a full introduction of the Conditions of Trade removing the need for separate submissions to the bureau, the introduction of continuous contracts and a full set of enhanced risk level standards for submission into DDM. As a market we have just over 18 months to make this a reality, with data quality being at the heart of the success of this programme of work. And that’s why data quality shouldn’t just be considered as a Lloyd’s requirement but as a business necessity and core to the success of a firms delegated authority offering.