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Despite all the talk of modernisation, manual processing, low productivity and clunky trading interaction still define the London Market’s day-to-day operations.
Last month we wrote about the perceptions of Underwriters and Brokers in relation to their hopes for better trading tools and their (possibly misplaced) belief that everyone will be e-trading within the next 18 months. Sadly in 2022 risk placing is still a throwback to the 1990’s where email and PDF’s prevail and productivity tanks as human effort is duplicated or triplicated through interminable rekeying and poor data integration.
On any given morning in the London insurance district you’ll find hundreds of broking teams picking up overnight risk requests on email, printing them out for evaluation before loading them back onto email to send out to underwriters for quotation. As the day wears on these quotes are assessed and fed back by underwriters, on email, and then sent out again by the brokers, again on email, to the international markets. This unremitting and largely manual process is one that every broker and underwriter recognises as inefficient, slow and demoralising.
Two ‘trading systems’ PPL and Whitespace, are in play in the Market and while Whitespace is by far the most user-friendly option, PPL has the dominant share of users. Despite its market share PPL is still essentially a ‘document repository’ which offers little to underwriters and brokers looking for tech that can oil the wheels of the trading process itself.
After many false dawns there may be hope on the horizon however – “Next Gen” PPL is promised for early 2023, Whitespace, now owned by global tech company Verisk, is building out its popular system and others, like Acrisure are also developing fast. So, competition may look like the cavalry coming over the hill, but will these new systems really meet the users needs?
Gracechurch’s recent research highlighted the top three must-haves from trading systems:
#1 Integration with back office systems: stand-alone systems perpetuate multiplication of effort so integration would be the biggest win for any trading system, reducing energy-sapping re-keying and unleashing productivity and innovation gains.
“Straight-through processing. In the life of a risk only one person in the entire chain, from purchaser to ultimate risk-bearer, should have to key in any details of the risk to any system.”
#2 Communications technology support for remote trading: face-to-face is still the preferred way of trading but systems that support trading communications in a hybrid work environment would be another big win. Some suggest built-in chat and/or video functionality to allow better collaboration between underwriter and broker.
“A shared platform where broker and underwriter can walk through a slip as if doing it face-to-face.”
#3 User friendly systems that are continuously improved: one of the biggest frustrations with PPL is the static nature of the system where promised updates don’t happen, or only happen as big infrequent ‘Next Gen’ improvements – users want to see a ‘Kaizen’ approach in which trading systems continually evolve to meet user needs.
“Easy to use. Easy to send to the underwriter. Easy to make changes to. The e-platform can “talk” to other computer systems (the insurer’s, or the broker’s) and populate data fields in those respective systems, automatically.”
So, contrary to popular opinion, brokers and underwriters completely get that tech is coming, know what good looks like and are prepared to embrace these new tools of the trade – as long as they are fit for purpose, enable something better and evolve at the pace of the market rather than that of the technology providers.
Let’s hope that the competition can rise to the challenge because if it can’t, then London’s productivity problem won’t go away anytime soon.
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