Core hosted a discussion session on the 26th March to look at “How will the new placing platform effect the London market?” chaired by Malcolm Newman*. The discussion centred on the proposal of the implementation of a single eplacing platform backed by LIBBA, IUA, Lloyd’s and LMA. The discussion raised the question "will it deliver all that it promises and what other considerations need to be taken into account?"
London Market Group (LMG) is a senior market wide body whose primary function is to act as champion of the modernisation agenda in the London Market. In its 2013 review of London’s collective modernisation vision, it concluded that the market needed to improve its accessibility via a central trading platform.
A number of broker firms indicated their intention to work from a single e-platform and as a result the Placing Platform Limited (PPL) was formed. PPL has now completed the tender process and has appointed Ebix as the provider.
The London Market faces a number of challenges. Globalisation and technological change are affecting the commercial insurance industry as much as any other. With future growth in the industry being driven by emerging markets with regional hubs such as Singapore providing alternatives for business that would have been traditionally placed in London. These changes are making London’s global leadership position open and under threat.
With increasing digitisation of business across all industries and sectors, the London Market needs to adapt from its traditional manual practices. The main aim is to realise a vision where by all risks can be captured and processed electronically, face to face negotiations will remain a mainstay of approach and some business with be processed entirely remotely. The benefits of this would be:
The discussion proved to be very lively and informative with many varying opinions, but one clear theme emerged; the benefits outweigh the challenges, but with the buy-in from all stakeholders and a clear way forward, the challenges can be overcome and enable it to become a success in the market. Some of the points that were raised included:
LondonPlace: the name is too London centric and does not imply a truly global platform which it is supposed to represent.
Traditional market: Moving away from a physical “stamp and sign” may be a break too far from tradition. Many suggestions were discussed, including the use of the Lloyds passes, electronic pens, tablets as a way of integrating the “stamp and sign” securely and electronically that may get buy in.
Prevention of re-keying: It was noted that currently all information is not added by brokers trying to develop a system that requires all brokers to add in information will not happen in reality.
Timelines: There was much debate around this topic, with agreement by attendees all that these timelines are totally unrealistic. The general consensus was more time should be made to plan and develop the system in order to get true adoption and buy in. If all houses do not adopt and use the platform then it defeats the object.
Not a new concept: There are systems already in place, which have been adopted by some organisations. As they have already made an investment in this area, why would they now make a further investment to move to this platform?
The provider: There was a discussion around the tender process and how the winner was chosen. Questions around, was enough time spent truly understanding the need and what the final deciding factors in choosing Ebix was. LondonPlace is a new platform and not an extension of the current Ebix platform, but there was some discussion as to whether this is actually true.
There are still considerable difficulties ahead around development. Key factors in the success of this initiative are ease of adoption, security, cost and efficiency. There are implications not just for the implementation of the platform but for workflow and administration processes as a whole in the market. The next few months shall be an interesting time to see how the challenges are faced to ensure adoption in the industry.
If you would like further information on the discussion session or upcoming sessions please contact Joyce Harmon, Market Analyst, Core. (joyce.harmon@core.co.uk) or complete our contact form.
*Malcolm Newman, Managing Director, SCOR UK, Chairman of the International Underwriting Association of London, Member of the London Market Group, Chairman of Core