Special VOI episode: London Market Group Data Council

This week’s special episode of The Voice of Insurance podcast focuses on the London Market Group’s (LMG) Data Council, the senior executive body driving the adoption of the latest wave of London market tech reform. The Council’s first task has been to agree to the Core Data Record (CDR) initiative. The CDR will ensure that there is one common ´language´ for data that will improve data quality, benefit the London Market’s internal processes and make it easier for other global insurance hubs to connect with London.

Mark Geoghegan chats to Paul Jardine, Chairman of Asta, Sheila Cameron, CEO, LMA, and Clyde Bernstein, Head of Broking, GB & Head of Broking Technology, WTW, about the purpose of the Core Data Record, which is to facilitate accounting and settlement, as well as tax and regulatory reporting for the London insurance market.

All three speakers, highly eloquent, made it very simple to understand what a Core Data Record is and the main elements of the Data Council’s mission. We highly recommend you listen to this extremely insightful and engaging podcast.

Five months have passed since the London Market Group (LMG) announced the creation of a Data Council, and this special episode provides an insight into the work completed so far and its vision for the market.

Kicking off the chat, Mark asks what the Data Council is; Sheila responds, “The purpose of the Data Council is really simple, it is first of all to drive digitilisation and second of all is to drive adoption across our marketplace; and we want to drive adoption spread across five phases. So, the first of those phases is about data standards and what is our standards methodology of choice. The second phase then is all about what´s called a CDR or Core Data Record, and the purpose of the Core Data Record is very straightforward – it does two things – it facilitates accounting and settlement, and it facilitates tax and regulatory reporting. The third phase then is all about computable contracts and how do we build those computable contracts across our marketplace. Then the fourth phase is about the process; so who is responsible for submitting which piece of data to what degree of quality, to which system at what point in the process, and that sounds like it should be relatively straightforward, but it isn’t, and it’s actually quite complex for our marketplace. And the fifth and final phase then is all about APIs.”

What´s different this time round?

The insurance market has gone through various modernisation and digitisation initiatives in the past; why is it different this time from what’s come before, asks Mark. Answering first, Clyde comments, “I guess there´s a recognition that actually as an industry we’ve got to be fit for the market of the future we have to recognise that the industry needs to adapt and digitisation is a natural part of that evolution.”

Going digital or digitisation can mean many things; Mark asks Paul how he would describe this to the layperson. Paul remarks, “I think what we´re trying to achieve through the Data Council, the kind of firm foundations for a different future. Whilst there may be a common perception for everything is driven by technology and machines, the reality is, as we all know in our marketplace, is that there is an awful lot of manual effort, an awful lot of manual error, and awful lot of manual workaround.” Paul expands on what´s at the heart of every discussion and every decision taken, adding, “One of the guiding principles that we have as a Data Council is that we have the customer in mind with every discussion and every decision that we make, and eventually, our aim is to clearly make that customer journey a world-class customer journey with minimal workarounds, single point of data entry and one single version of the truth.”

How does this all fit in from a broker perspective, and does a broker need to change its systems? Clyde answers, “I think we’re on a journey, Mark, and the way that we start to decide how we capture that information if it is not captured already, you have to be able to tell a story.” Clyde discusses that while a lot of the data is available today, the process might be quite different depending on the journey. Further elaborating on this point, Clyde says, “The key thing, Mark, is articulating why we’re doing what we’re doing with the Core Data Record because this is a stepping stone into a much bigger opportunity around addressing clarity of contract, certainty of payment and all of the other things that start to come through from computable trading in the marketplace.”

What about those legacy systems?

Will Insurers need to throw out all their old legacy systems to make this work? Paul replies, “For me, I don´t think that this is as much of a change for the underlying systems in terms of this data spec as you might imagine. The data items are all there in the main, as Sheila said, maybe in different places.” Paul discusses that there is common agreement and enthusiasm in the market to start this process and that this is the first time he has seen all stakeholders at the table. Discussing this further, Paul adds that the work of the tech committee has been astounding, with many members giving up their time freely in addition to their day job to process thousands of pieces of feedback and come back with recommendations, before concluding, “For me, it´s incredibly powerful, and I’m really optimistic that this is the start of a journey that will lead to success and will fundamentally change the customer perception of specialty insurance and reinsurance.”

Speaking about the Intelligent Market Reform Contracts, which are computable contracts, Sheila describes the three phases in making this happen and why getting there is vital. “At the end of the day, the technology solution, the data standards, what the data elements are, we can all do that, that´s not hard. What’s going to be a challenge is how we adopt this, and how we adopt the ultimately computable contracts that are going to drive digitisation across the marketplace.” Sheila adds that firms will be on different paths depending on their systems and that the Council is looking at ways to facilitate adoption paths for all. Not everyone is going to go to the fast lane; some will go slow or middle, and that´s fine, this is a varied market, bringing different things to the table, but we need to start somewhere, which is the CDR.

The panel discusses that although there may be some fatigue around change in the market as it has been taking place for the last decade or so, the Data Council is aware that the London Market consists of different organisations, with different needs and levels of sophistication. Changes need to work for everyone as companies are at different stages of the journey of digital maturity. The CDR is a first stepping-stone in the journey to deliver more access, innovation, and better solutions in the marketplace.

Expanding on this point, Sheila says, “The Data Council is not here to build magical new systems. The Data Council is here to define the standards that we will use to talk to each other and enable that innovation.” Speaking about what sets this vision apart from other previous efforts to digitise the market, Sheila adds, “That´s one of the things that’s different about the Data Council, it is not here to build systems, it´s here to build and define standards and processes and that’s what we’re here to do.”

AdvantageGo is aligned to the CDR initiative, and our systems are CDR compliant and configurable to capture data in the CDR fields. We will continue to review and analyse the Blueprint 2 specs as they are published so that our customers can benefit from the developments that the digital marketplace promises to offer.