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29 February 2021 | 10-minute read
In a recent survey the LMA conducted of its members, the hardening market was the number one opportunity for the Lloyd’s market over the next 12 months. Whilst our members seek to maintain underwriting discipline and price adequacy through this hardening market, the priorities that our members have for the LMA are clearly focused on underpinning our future as a marketplace: drive data standards and support the market to successfully implement the Future at Lloyd’s strategy.
This feedback supports the LMA’s 2021 objectives. Chief among them is to work with Lloyd’s to deliver the Future at Lloyd’s market modernisation strategy.
Our formal 2021 objectives state that we will “engage, challenge, and where appropriate partner with Lloyd’s” on delivery of the change programme.
It is the LMA’s responsibility to ensure that all Lloyd’s initiatives targets the genuine business needs of the market’s underwriting businesses. To achieve that, we will stand shoulder to shoulder with Lloyd’s in public, so our clients see a single, strong, united marketplace, but toe to toe behind closed doors, when necessary, as the advocate that keeps members’ collective agenda at the very front of Corporation minds.
Data standards
Central to the success of the Future at Lloyd’s, and therefore a key LMA priority, is to drive the creation of common data standards to be implemented not just at Lloyd’s, but across the London market. All market participants should be able to exchange and manipulate data without first altering it. That will facilitate the efficiencies now within reach through all the other platforms on the Future at Lloyd’s agenda. Simple questions such as the way a year is recorded – with two digits or four – must be agreed and answered. We at the LMA don’t care which option is selected, only that everyone agrees so that we can have an efficient and effective way of transferring data.
Efficiency platforms
In tandem, we will concentrate on the development of highly efficient technology platforms, fuelled by data in the agreed format, for:
- open-market placement
- claims, and
- delegated authority.
The prize for achieving all this is the widespread opportunity to embrace electronic processing within a digitised market. Where the business is suited to such trading, we will collectively become faster, more accurate, and much more efficient (that is, less expensive) when these elements are in place, leaving more of our costly resources for those complex and difficult matters which require greater human input.
Technical depth
With this work ongoing, the LMA will continue to flex its technical strength against the many day-to-day matters which impact the marketplace. The technical depth of our own team and the countless volunteer experts drawn from the membership has for decades provided technical leadership for carriers and brokers in Lloyd’s, London, and further afield. However, the usual work of these specialist committees and working parties will in some cases proceed with a new flavour added to the mix.
One of these is product simplification through less complex wordings. Last year’s FCA test case over the applicability of business interruption contagious disease coverage illuminates the necessity: we must work together diligently to make our products and the intentions behind them easier for our clients to understand. Alongside this, the LMA, through its technical working groups, will continue to drive forward the market’s collective underwriting discipline, best-practice pricing, and customer-focussed enhancement of the business processes we adopt.
Regulatory punch
Brexit is another issue on the LMA’s 2021 priorities agenda. Areas for attention include the smooth working of Lloyd’s Europe through a revised operating model, and building on the market’s successful Part VII transfer of European clients’ existing business to the platform. In this as in other regulatory areas, the LMA acts both as the market’s voice with Lloyd’s in discussions with third-party bodies, and managing agencies’ collective voice in discussions with Lloyd’s as regulator of market businesses.
At home, we will continue to monitor potential changes to solvency measures, advocating always for a single model for all UK risk carriers. We will review the optimal regulatory oversight model in conjunction with Lloyd’s, the PRA, and FCA, and work hand in hand with Lloyd’s to review of its complex array of Minimum Standard Requirements. As a baseline, we support Lloyd’s stated aim to expand the application of a principles-based standards regime.
People power
Fostering the development and diversity of the London market’s workforce is an equally important priority. Indeed our recent member survey indicated that for those who have been in the market for less than 10 years, the offering they value most from the LMA is our technical training. We have relaunched the enormously successful LMA Academy, and built on its already comprehensive underwriting and claims educational offering to add finance, risk and actuarial programmes, with a new Operations Academy to be launched in the second half of this year. This will dramatically strengthen our support of member managing agencies as they strive to create a broad and deep workforce fit for the 21st century.
To enhance engagement with the real people we serve, we will step up the LMA’s communications programme at all levels across the market. We will introduce new forums, bitesize information sessions, update emails, and next-generation committees, and will implement a user-friendly knowledge exchange on an overhauled LMA web site.
We will also do our part to support D&I in the market by partnering with Lloyd’s on important initiatives such as Inclusion @ Lloyd’s and the Cultural Advisory Group. We are determined to lead by example, so the LMA Board has agreed that its composition will align with that of the Council of Lloyd’s, with 30% of members either female and / or from a black, Asian, or ethic minority community by the end of 2023.
The LMA’s work is driven by our membership. We continue to listen constantly to our Board, to managing and members agency staff, to others in the market, and to third parties, whether to take account of brickbats or bouquets. Our 2021 priorities reflect all those sorts and sources of input. They require us to prepare for the future, even as we reap the rewards of the present. I encourage everyone to take part.