LONDON (Reuters) – The Lloyd’s of London) Ltd. [SOLYD.UL] insurance market, is planning to launch two electronic exchanges next year as part of a three-year review, it said on Monday, as it seeks to fend off competition from low-cost rivals.
FILE PHOTO: The Lloyd’s of London building in the financial district of London, London, united Kingdom, February 1, 2018. (REUTERS photo/Simon Dawson/File Photo
Lloyd’s, which is made up of 99 consortium members, and is focused on large-scale commercial insurance, it has been two years of heavy losses caused by natural disasters and are faced with the uncertainty that is the result of a Uk exit from the European Union.
It has been a slow and process, some of on-line transactions, but in many cases it is still done face-to-face with Lloyd’s of London, the tower.
The simplification and automation of processes, reduction in the cost of doing business at Lloyd’s, 25 or 30% of income, compared to the current 40 per cent, it said.
“We’re trying to take a step in the right direction,” Lloyd’s chief executive, John Neal, told Reuters, adding that the initial estimates for the cost of the changes would be in the “low hundreds of millions of pounds.
One of the new electronic exchange will be focusing on the easier to the risks and more complex risks, with the “early build” of the two, in December Of 2020, Lloyd’s said. New technology will be rolled out in 2021 and 202.
Lloyd’s said that in order to pay for the changes, which would be able to use surplus funds, increasing the senior debt or a securitisation of a business is one of those revenue streams, but it would not be an increase of the charge against the member.
In an effort to compete with centres such as Bermuda, Lloyd’s is also looking to attract participants for the offering of insurance-linked securities such as catastrophe bonds.
This is the offer of the interior and kingdom relations, and the ability to have a physical presence at Lloyd’s.
Lloyd’s said Monday that a re-insurance group, Munich Re, which already has a presence in Lloyd’s, was the establishment of the first external consortium-in-a-box”, which will focus on new areas, such as renewable sources of energy.
Lloyd’s is also pushing its members to improve their underwriting performance, and Neal said it is an event for the launch of a detailed strategy, that is, the market is expected to have a combined ratio below 100% in 2019, which means that there is an underwriting profit.
Some of the real estate brokers and small insurance companies, which have already undergone years of severe competition, the fear is that there will be no place for them in the new look of Lloyd’s.
“Efficiency shouldn’t be in the position of protecting their interests,” said Simon of Matson, chief executive officer of the real estate agent Gallagher SENT.
“Our role as brokers is, and always will be, as the advocate for the customer.”
FILE PHOTO: Signage is seen at the Lloyd’s of London building in the financial district of London, London, united Kingdom, April 16, 2019 at the latest. (REUTERS photo/Hannah McKay/File Photo
Kelly Croft, chief executive officer of the London & International Insurance Brokers Association, said, “technology has a role to play…but not at the expense of the value that an agent brings it”.
Neal said Lloyd’s was not aimed at the exclusion of the real estate agents try to make the streamline on the market, but it was a result of their input.
“We’re trying to get to the brokers on the journey with us.”
Reporting by Carolyn Cohn; Editing by Jane Merriman, Lisa Shumaker