With many of the necessary data standards and much of the required technology infrastructure already in place to allow for electronic trading, ingrained traditions and fear of change are now the biggest hurdles facing insurers and brokers looking to go digital, according to experts speaking at the ACORD London Conference.

“Technology is the least of your worries,” said Sue Langley, director of market operations and North America at Lloyd's of London, during a panel on the future of placing.

“Fear is a big hurdle–the fear that I'm not going to have the same personal relationship with the brokers and underwriters,” she said. “Ideally, you won't lose that with electronic placing, but you will be able to dispense with the queues for simple changes or endorsements.”

“It's almost like we're pausing for breath,” added Paul Jardine, CEO of Catlin Underwriting Agencies Ltd. and chair of the Lloyd's Market Association. “We've got the tech in place, so now we have to win the hearts and minds of the market.”

Mr. Jardine said that it might be time to throw down the gauntlet so progress becomes more of an imperative. “We have targets on contract certainty and claims going electronic, and we may want targets on electronic placing as well,” he added.

Mr. Jardine also cited “commoditization” as one of the “fear factors” holding up progress on electronic trading.

“A bigger challenge is to become more of a portfolio manager and look at the bigger risk picture, rather than the loss of face-to-face contact on smaller risks,” he said. “We need to make sure that when we are deploying expensive talent, it should be where it's most cost-effectively employed.”

Throughout the conference, the inability to secure senior management support for the implementation of standards and the move to electronic trading was cited by speakers here and in attendee surveys as one of the main challenges facing the market.

“Leadership is a finite resource in any organization,” said Mark Kinsella, chief technology officer at Benfield in the United Kingdom. “You're constantly competing for the attention and backing of those who exert leadership, so standards are made a priority throughout the operation.”

The information technology department and the various business divisions they serve must therefore work together to make a compelling business case for standards implementation as well as electronic trading, or risk losing budget battles to shorter-term concerns.

“If we don't get some significant volume being handled electronically soon, it'll be seen by senior management as a 'nice to have' rather than as a 'have to have' priority–especially in a softening [property-casualty] market with the pressure on to contain costs to keep profitability up,” said Mr. Jardine.

“We cannot depend on a 'Field of Dreams' mentality that if we build it, they will come,” he added. “We need to show the volume to justify the investment.”

Special Reports /

Some Shy Away From E-Placing To Maintain Face-To-Face Contact

Related Stories

Recommended For You