Three Myths of London Market Digital Transformation

You’ve heard them before, right?  The naysayers with the same list of reasons why one, or all, of the current London Market initiatives will fail.  It’s the same list that has been doing the rounds, not just in recent years but for decades.  There have been initiative failures in the past but, this time, it is different.

So, let’s look at dispelling some myths:

The CDR won’t solve the problem(s)!  Why is Lloyd’s making me collect all this pointless information?

First it is worth remembering the CDR (and its more analogue sibling the iMRC) are here to serve only 4 Use cases:

  1. Tax
  2. Regulatory reporting
  3. Accounting and settlement
  4. FNOLS

We are all aware that Lloyd’s holds licences to trade in over 70 countries across the world.  Each country has its own regulator and each of those have their own regulatory reporting requirements.  Lloyd’s has a responsibility to provide that regulatory reporting in order to comply with the requirements and maintenance of the licences.  So, a key objective of the CDR is to aid collecting that data in a ‘uniform’ way.

To collect that data in a ‘uniform’ way means agreeing and setting data standards.  A set of language and terminology that we all understand whether that is the meaning of a class of business or the format of dates.  Diverging from past approaches, the market is now looking to adopt these data standards across all market transformation initiatives, in partnership with ACORD (the global standards-setting body for the insurance and related financial services industries), so all market members are all speaking the same language.  This means that when it comes to integrating systems, whether it is your policy administration system or a placing platform, the systems can understand and map the data it receives and sends.  This is why the LMG is committed to make these data standards scalable. 

The CDR has been signed off for insurance and facultative reinsurance.  However, the keen-eyed analysts amongst you may have spotted data options for quota share, stop loss, surplus and excess of loss.  So, all contract classifications will be covered by the CDR in time.

This means having a data first approach baked into your processes will quickly become essential.  Morning Data was the first insurtech company to build a data-first approach as the core of our solution design and we are committed to articulating this to the rest of the global market.

Documents are the most important part of the process; we cannot operate without documents!

Documents should not be the start of your process.  The days of opening last year’s slip and manually editing details has to end; the risk of errors is too high and the labour too intensive.  With a data first approach, documents become a method to display the data, and not the start of the process.  If something needs changing, change the data and represent it in a new version of that document.  After all, if you are data first you can produce multiple different documents from the same data source, and not have to re-key or copy and paste.

In every walk of life data is at the start of the process whether buying car insurance, filling out tax forms, our wearables, or signing up for streaming services. The initial incarnations of these processes were a bit painful but then they mastered the art of collecting more data about us from the small amounts we gave them (data enrichment).  This market could skip the painful stage and jump straight to enriching data based on smaller amounts provided.  Allowing the more creative, salesy focussed producing broker, who is often a different set of skills and personality to the technician, start the processes with a data first approach.

The market is moving towards the new Market Reform Contract known as the iMRC.  Although published in July this year, this video from the LMG gives a good overview of the objectives of the iMRC.  This new contract will be leveraging the use of the CDR, giving contracts clarity.  In time though, the ambition is to be using Computable Contracts, made up of data from a core system, work bench or other source of structured data.

What is a computable contract?  Check out this article on, which provides a great overview of computable contracts:

“A contract is an agreement between parties creating mutual obligations that are enforceable by law. A computable contract is one that includes enough detail and provides sufficient clarity as to provide unambiguous answers to any question related to its terms and conditions. Computable contracts can be represented in different ways for different purposes – as documents in “legalese” written by and for lawyers, or as computer programs. From a practical point of view, computable contracts are capable of automating execution.

Digital transformation will mean the end to face-to-face dealings.

All stakeholders know and accept that this market’s USP is its network of relationships built and supported through our geographical closeness in EC3.

The digital transformation initiatives are sensitive to this and are designed to, not only support this, but to put clients first and facilitate innovation in products and services.  What digital transformation does is speed up the process of data sharing, providing consistent and unambiguous data to facilitate greater collaboration across the market.  Couple this with the market’s face-to-face USP, and London will continue to be the leading insurance hub.

Aiming for just CDR compliance as a data ambition may yield disappointment.  After all it is not a full underwriting file, and it is only submitted to the Gateway at the point of Bind.  But, if you do not have a data first strategy, then the CDR would be a good first step on that journey.

Need help?

Morning Data is well placed to help, so why not get in touch?

  • As the first #datafirst insurtech, data first is baked into our solutions and thinking.
  • Benefit from over 30 years of our intellectual property investment.
  • We have a range of solutions ranging from low-code front end digital solution through to full Policy Administration Systems for intermediaries and (re)insurers.

Like you, we value people, relationships, and innovation.

Thank you for reading.

Paul Buckle

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