Embracing change will deliver a brighter future
The London Market Group's Target Operating Model is driving growth and modernisation across the world's pre-eminent insurance market. Adrian…
The London Market Group's Target Operating Model (TOM) is driving growth and modernisation across the world's pre-eminent insurance market. Adrian Thornycroft, Programme Director, explains how this is being achieved.
The role of the Target Operating Model (TOM) is to make it easier to do business with the London Market by building on the best the UK specialty insurance industry has to offer.
This includes deep reserves of capital, effective pricing, highly skilled insurance professionals, and strong regulation that ensures the rule of law always applies.
The TOM work is necessary because, over time, the market's processes, interactions, controls, and regulations have reduced our competitiveness. We've become a little too complicated for our customers to deal with easily.
We all have technology in our personal lives that makes things easier, and people have been increasingly asking us: "Why can't it be easier to do business with you guys? We want to hear from you more quickly and get documentation faster. You ask for too much information."
The simple answer is that we still want to provide the great products and solutions and the highly disciplined initiatives that enable us to have a fantastic brand. But we want to make it more straightforward for people to work with us.
My day-to-day job is to deliver the various solutions that will make London an easier place to do business. I have a team working on making the money flow more efficiently so that premiums and claims get to the right people, faster and a second team that is simplifying how we work with cover holders. There is also a third team working with the data standards and connecting up the data and technical infrastructure; while another team is making electronic placement a reality so that data can go in once and then be used by many people, many times.
The London insurance market represents 25 per cent of the City of London's GDP so we're a big player and it's important that we preserve the strength of our sector. I really love the fact that we're there to make sure 'Team GB Specialty Insurance' continues to be the dominant player in the world.
What concerns me is resistance to change. We have a marvellous future, London is still bigger than the next three markets combined, but the hard message is that London is losing market share in some instances – especially emerging markets. In addition, our revenues are relatively flat, whereas global insurance in this space is growing. If we don't hurry up we risk losing our pre-eminent position.
The work we do is complex because we have 300 market firms that need to buy into what we are doing and then go on to implement it. Another critical team is the one that is supporting those firms as they think about adopting the different solutions, and change their own businesses.
Having said that, the change process will eventually enable us to operate in a world of specialty markets where data has consistent meaning and flows efficiently between partners. Then we can generate some exceptional outcomes for customers, based around deep knowledge and quick response.
Currently we have processes where the important part – the underwriting decision – can be taken very quickly in a faceto-face environment, but the paperwork may take weeks or months to follow. But what if that could happen in days, or hours? What if, instead of information being input by every person in the chain, it was immediately available. Then the process could be much quicker.
We have a fantastic opportunity, not only for selling and obtaining cover, but also to enable our policyholders to see where their claim is, and know the outcomes very quickly. We face some tough challenges, but I'm confident we can meet them and help secure a very bright future for the London insurance market.
Getting the market on board
The big challenge is adoption. This is not a question of the solutions being built and delivered and then the programme being over. Senior leadership in market firms needs to implement these initiatives quickly and efficiently to ensure that they can benefit from them – and to work out how best to encourage and incentivise their staff to adopt the different solutions.
The TOM team is driving adoption with a change management team who engage with, and support, the individual businesses – trying to develop material in the centre that is useful to as many parties as possible.
We are also alive to the fact that, while we are working on today's solutions, we cannot ignore developments that might affect how we work in the future, so we want to keep our eyes open for whatever is coming over the horizon. We have created the Innovation Exchange to provide a mechanism for identifying ideas and looking for those incremental improvements that are as important as the "silver bullet". By engendering an "innovation culture" the market is encouraged to share ideas and create processes for collaborative innovation. The idea is to triage, prioritise and explore new ideas in a low risk, flexible way.