by Chris Newman, Managing Director, Global
Last week, Lloyd’s published the first version of its Core Data Record (CDR) and announced that it will be collaborating with ACORD to drive further adoption of the global standards already used in the London Market and internationally.
This represents a key milestone for Lloyd’s Blueprint Two programme, which is the second phase of the “Future at Lloyd’s” strategy to shift the market to a digital ecosystem, powered by data and the latest technology. Let’s take a closer look at what Lloyd’s and ACORD are doing together to streamline communications and what it will mean for the industry.
What’s behind the CDR project?
Lloyd’s CDR initiative will ultimately enable standardised, quality data to flow through the London Market, with the aim of significantly improving operations, reducing the cost and effort of doing business, and delivering better service to customers.
These global standards are ACORD’s daily work: our primary objective is to collaborate with market participants on the development and implementation of data standards to give the industry a common language with which to communicate and transact. The development of the Core Data Record, based on ACORD Standards, will ensure that market participants are able to leverage their existing systems and taxonomies to provide data in a consistent and coherent way.
This will enable Lloyd’s stakeholders to maximise the value derived from their data, increase flexibility and adaptability, and capture efficiencies made possible only by digital transformation. Further, Lloyd’s will continue to explore opportunities for collaboration to simplify access and provide better solutions in the placement, claims, and settlement journeys.
In fact, collaboration is already well underway. Lloyd’s is now conducting a market-wide consultation to seek input and feedback on the first iteration of the CDR. This includes working with a beta group of brokers, insurers, market associations, and placement providers to advance and refine the CDR. This input will assist the development of the CDR through the validation of data inputs and the testing of the technology process and data enrichment.
What will these enhanced standards mean for Lloyd’s?
At a global level, our industry is working toward a unified standard that can be used anywhere. Lloyd’s has always had a massive global reach, but sometimes lacked the connections to facilitate easy interoperability. They are now looking at standards that are relevant across all geographies, which will make it easier for the London Market to connect globally.
Lloyd’s is taking a global view with this action, and that’s a positive both for the market and for the industry as a whole. Lloyd’s participants are global (in fact, many US-domiciled carriers own a Lloyd’s entity), and conducting business has always been filled with nuances. Now, the Core Data Record will be providing a common frame of reference for the industry, minimising the “Lloydsisms” and “Londonisms,” and really streamlining the process.
What it will not change are the things the London Market is best known for: highly skilled underwriting and claims talent, the highest level of solvency, and world-class regulators. The market will only become more attractive to international capacity when trading partners don’t have to duplicate costs by adopting processes and practices unique to London.
As ACORD President and CEO Bill Pieroni has said, “Lloyd’s is the beating heart of insurance – there is no more venerable and influential institution in our industry. Lloyd’s leverage of the ACORD Standards is further testament to the fact that the industry is recognising the impact of data standards.”
Why are standards so important?
Standards reduce the frictional costs of data exchange, offering significant network effects. These standards will allow market participants to more easily integrate with the Lloyd’s ecosystem, deploy state-of-the-market solutions, and connect with new trading partners, platforms, and geographies.
Standardising data is a critical first step in converting it into actionable information. Data that is stored and exchanged in an industry-standard form becomes more accessible. It’s easier and less expensive to extract value from the data, and talent can then focus their efforts on applying it in more effective and innovative ways – whether it’s in customer acquisition, underwriting, claims, or any other core insurance activity.
It’s in those core competencies that companies differentiate themselves. Analyzing, applying, and leveraging data to excel in these areas is a worthwhile use of limited time, resources, and talent; coming up with bespoke terminologies, models, and standardised formats for storing and transmitting that data is not. To put it bluntly: let the experts handle the boring but necessary task of building the pitch so you can go out there, play, and win!
What does this signal for the future of digitisation?
ACORD and Lloyd’s both are committed to enabling digitisation throughout the global insurance ecosystem. The Future at Lloyd’s is underpinned by advanced data collection and management methods, and Lloyd’s focus is on creating solutions that will enable brokers, underwriters, and partners to operate in a much more streamlined way. The CDR is central to this strategy.
Working with ACORD Standards will enable Lloyd’s to deliver efficiencies and real value and benefits to the market. The first iteration of the Core Data Record represents an important shift from concept to practice. Working together, our industry will continue to reshape our models and ways of working as we move into the digital future.