Centralised e-trading interconnectivity would revolutionise London’s underwriting experience

The long – and ongoing – digitalisation of the London market has spawned numerous e-placement platforms, allowing brokers to connect with multiple carriers without wasting hours queuing at boxes.

For underwriters, however, the process is less than seamless. On receiving emailed notification of a broker quote request or submission, the busy underwriter has to exit whatever system they are using and log on to the relevant e-trading platform, taking care to remember which of perhaps a multitude of usernames and passwords apply.

If it has been a while since they last used that particular system, the underwriter may need to work out how to use it all over again. Should they decide to write the business, they will then have to exit the platform, rekey data into their own policy administration system or workbench, before going back into the placement system for yet more data entry.

The status quo is hampering productivity, efficiency and the general experience of professionals who are hired (and indeed paid) for their risk assessment and analytical skills, not to key information in on a screen. It is also complicating data acquisition and making it harder for underwriters to fully exploit their workbenches, which house valuable intellectual property linked to their target operating models.

In a world of fast-evolving risks – driven by globalised supply chains, geopolitical tensions, the rise of artificial intelligence and many other factors – there is additional complexity to the data capture and normalisation process. For this reason, the market needs more than just basic data standards to capture the full view of relevant risk factors in underwriting.

Fortunately, this frustrating issue is receiving attention while volumes of digital placements continue to rise.

The claims model

As plans progress, one model should inform the buildout of the planned central service: Electronic Claims File (ECF) Write Back.

This claims initiative is widely seen as one of the most universally successful in the London modernisation agenda. Implemented in 2015, Write Back allows insurance claims adjusters to work exclusively within their own claims management systems, irrespective of what claims system brokers were using.

It meant insurers’ claims systems could fetch claims data and documentation submitted to an external platform and integrate them with ease with their own internal systems. Claims can be reviewed 24/7 and settled faster, with claims data more easily leveraged for underwriting insights.

ECF Write Back also uses standard messaging, so in a market riddled with operational idiosyncrasies and divergent ways of communicating, all users were at least speaking the same language.

Some stakeholders are looking to a partial solution to the second challenge – data standards – as a silver bullet for the entire initiative. The hope is an interoperability environment where brokers and carriers use the same terminology will be sufficient. This is simply not the case

In a similar way to ECF Write Back, underwriters ultimately are keen to work exclusively within their own workbenches and policy administration systems, responding to brokers through them regardless of what e-trading platform (or indeed broker proprietary platform) the intermediary is using and realise the full return on the substantial investment they have made in the solutions they have built or bought.

ECF Write Back, it should be said, cannot be replicated exactly. As one notable contrast, while the e-trading ecosystem has developed with the needs of brokers front and centre, ECF Write Back was designed with carriers in mind.

What is more, the operating model of the London claims universe is far more straightforward than that of risk placement, with one market-wide system – ECF – and a small handful of claims solutions providers. Common standards were adopted right from the birth of ECF in 2004, more than a decade before Write Back transformed the basic infrastructure. Even then, ECF Write Back took a while to gain traction, as with any digital transformation.

ECF Write Back can nevertheless serve as a useful reference point for the development of something similar – an electronic trading platform writeback model. However, the market faces three main challenges if the project is to succeed, the largest of which has yet to be fully recognised.

Critical requirements 

The first involves the technical integration of the platforms, which include among others PPL, WhiteSpace and PlacingHub, and many more proprietary broker systems; the connectivity with carriers’ systems; and the ongoing maintenance the infrastructure will require as technologies change and are further enhanced.

The second challenge is the development of data standards for distribution chain participants to provide a good basis for common understanding, recognising not all data will be catered for.

The third and most complex element of the initiative by far is process alignment. This entails understanding how the workflows of the placing platforms can talk to carriers’ different workbenches and policy administration systems. It also involves understanding and catering to the individual nuances of the workflows within these carrier solutions.

As the market’s thoughts on this progress, some stakeholders are looking to a partial solution to the second challenge – data standards – as a silver bullet for the entire initiative. The hope is an interoperability environment where brokers and carriers use the same terminology will be sufficient. This is simply not the case. This variety in language across market participants reflects diversity in appetite, product and pricing strategy – a healthy market dynamic to encourage.

A strict adherence to standards may undermine flexibility in e-trading platforms, solution providers’ capabilities and underwriters’ flexibility to react and stay current on fast-evolving risks, thus disincentivising engagement. Further, a strict enforcement of standards would undoubtedly require significant process changes to carrier systems and introduce unintended downstream impacts – further increasing risk and cost to the effort.

Without a solution that balances thoughtful data standards with appropriate flexibility, alongside a thoughtful approach for process alignment, the market will not be achieving its goal of offering a central service to managing agents. Instead, the carriers themselves, their policy administration or their workbench vendors, will be left on their own to negotiate data models across companies and align workflow processes, increasing the risk the initiative could ultimately fail.

The London market has made huge strides streamlining operations, generating efficiencies and improving data acquisition.

However, it is vital we do not squander the opportunity by building only a partial solution. Instead, we must press ahead with a holistic service managing agents can use with ease and that takes the needs of all stakeholders into account.

Marc Jackson is head of commercial at Web Connectivity Limited