Imagine a world in which buying insurance from Lloyd’s is automated, low-cost and instant
I am an insurance buyer at a 600-employee company. My job is to purchase cover for a variety of risks faced by my organisation, which can be frustrating, as buying insurance can be a slow, costly and inefficient process.
While looking for marine cargo coverage, it was my broker who recommended Lloyd’s Risk Exchange as a new, convenient, low-cost to carry out my global risk procurement, with the reassurance of the Lloyd’s brand and associated benefits. The Exchange is an online platform, backed by the Lloyd’s central fund, strong financial ratings and robust regulatory oversight. We use it to place any low complexity risk in the Lloyd’s market, according to my preferences which we agree beforehand. For these risks, the Lloyd’s market has developed standard products, meaning the risks can be placed by brokers and managing general agents (who can deal directly with Lloyd’s now) without bespoke negotiation and product design. My frst question was, what’s a low-complexity risk? Apparently, it is anything that can be priced through algorithms using a set of predefined data points that my broker and I can provide – and more and more products are being added all the time.
So, for the marine cargo cover my company bought recently through the Exchange, we agreed a range of options up front, including any exclusions, retention, the appropriate policy limits and the maximum price I wanted to pay. As soon as my broker logged in, my company and exposure information was pulled up from our cloud software for him to look over, make any changes and approve for download into the Exchange.
This was all the information the Exchange needed to match my needs and preferences with the most competitive quotes given my choices. It also suggested some additional relevant coverage, bolt-ons and further exclusions I might be interested in, as well as showing me how these would aﬀect my premium. I made my selections and received confirmation that I was covered moments later.
One question I had was, how do I know I am getting the best deal? My broker told me that because Lloyd’s has standardised the risks, using commonly defined terms and policy conditions for specific classes, and built them into the Exchange’s mechanisms, once I add my preferences, the system has enough information to match me with the best policies in the Lloyd’s market, including those oﬀered by consortia.
Not only this, but by centralising a lot of the administration and compliance, the costs are lower and any claims I might have are much easier to process. It wasn’t possible to find a better deal on the open market. Policies bought through the Exchange are lower cost because Lloyd’s has pre-packaged the policies, removing the need for individual negotiations and bespoke product design.
Making policy changes, buying new cover or tracking my claims can be done online whenever I want. The greater product choice means I now have more insurance options. For example, the marine cargo policy I bought is dynamic, meaning it responds immediately to any changes to my company’s risk profile.
Most importantly, because the Exchange is underpinned by the latest technology, Lloyd’s has automated most of the buying process. Not only does this reduce my costs, it also means my broker can spend more time on doing higher value work for us, like buying cover for our complex risks, and advising us on how to reduce our risk profle and premiums. While the Exchange does not have standard policies for all my risks, it either provides quotes for the risk my broker enters, or for my more complex risks, directs her to relevant experts via the complex risk platform.
The Exchange is transforming the way I buy a large portion of my company’s insurance.