How Digital Distribution is Transforming the London Insurance Market

A panel comprising senior digital executives representing both brokers and insurers convened at the 2023 Verisk London Insurance Conference for an in-depth discussion on how digital distribution is transforming the London insurance marketplace.

Moderated by Reid Stanway, Chief Digital Officer of Verisk's Specialty Business Solutions division, the group included Anthony Siggers, Digital Leader at Marsh Specialty; Laurence King, Chief Digital Officer at Ardonagh Specialty, representing the broker community; Jack Bardrick, Head of Distribution at The Hartford; and Charlie Fellerman, Senior Strategy Manager at Ki Insurance offering a carrier perspective.

Opening the discussion, moderator Stanway posed the question: How is capturing structured data pre-placement evolving your business model and operations?

Siggers responded enthusiastically, stating, "By embracing a data-first approach and capturing structured data at the start of the process, we are accumulating an expansive knowledge base. This aggregated data becomes immensely valuable for advising clients, architecting portfolio solutions such as quota shares, and spurring market innovation to address coverage gaps."

Providing more context, Siggers elaborated, "If you understand not just a single client's risks, but patterns across many similar client segments, it becomes incredibly powerful. You can counsel them on optimal risk retention levels. You can arbitrage markets leveraging pricing insights from the data. And for competitive markets, you retain more risk, while for high-priced markets, you place more business - ultimately lowering total cost of risk."

When the discussion moved to King, he highlighted the benefits of new digital trading capabilities, stating, "Enabling straight-through digital placement workflows between brokers and carriers eliminates manual friction - that’s the future state and it’s a tremendous efficiency driver."

Expanding on the topic, King noted, "The ideal future trade environment entails brokers and carriers with integrated digital systems that can match and bind business automatically with no human intervention required. We receive bound lines directly from the carriers via APIs in a completely streamlined process."

Representing the carriers, Bardrick emphasised how technology can "provide product and capacity much more efficiently and intelligently" by alleviating administrative workload so underwriters can undertake higher-value activities.

Elaborating on the point, Bardrick noted, "New technologies give us opportunities to deliver product capacity in a considerably more effective and advanced manner. Additionally, eliminating repetitive administrative tasks and duplicative effort means we can redeploy our talent to apply their expertise further up the value chain.”

“It’s easy to become complacent with status quo processes, but embracing new tech is critical," he stressed.

Meanwhile, Fellerman promoted a ‘best-of-breed’ approach combining internally developed solutions, integrated third-party vendor products, and an API-enabled ecosystem. "We build the proprietary IP we want to control, connect market-leading third-party modules where specialised vendors excel, and ensure everything integrates smoothly via APIs," he commented.

Expanding his perspective, Fellerman reflected, "If you examine how the banking industry has evolved, they have fully embraced flexible ecosystems, enabling efficient, scalable systems within their institutions. The insurance sector is probably 15 years behind on structured data standardisation and seamless connections to power digital transformation."

The participants agreed that given the interconnected nature of the London Market, deep industry collaboration is fundamental to true digital transformation.

As Bardrick stressed, "This monumental shift cannot happen in silos - it mandates cross-sector collaboration across stakeholders."

There was extensive back-and-forth around the continuum between algorithmic and rules-based underwriting, and how capacity provision is changing with follow facilities.

Siggers noted, “Follow capacity should increasingly be commoditised, with differentiation coming through value-added services and crafting bespoke solutions for non-standard risks.”

Meanwhile, Fellerman added that: “Conventionally, follow has been binary, but current technology allows setting sophisticated rules calibrated to class of business with algorithms applied on top to optimise outcomes.”

Elaborating further, he said, "Top carriers will differentiate by leveraging enhanced underwriting processes and pricing disciplines. We don't follow that path - our pricing decisions derive from large-scale data analytics."

The group also addressed ecosystem challenges with legacy systems. According to King, “We have a patchwork of legacy and new systems, from 26-year-old mainframes to cutting-edge trade platforms leveraging external vendor tools."

However, he underscored that "The priority is collaborating to modernise core placement workflows. Once the data can flow seamlessly, it can populate downstream systems automatically."

In closing, the session made clear the future favours data-driven, digital enterprises. And based on the insights shared, the London Market is poised to harness technology to collaborate in new ways, remove frictions, enable innovation, and deliver better outcomes.

The digital revolution has arrived, and London is answering the call.