Lloyd's Attitudes Slow Tech Usage

"The changes they need to undertake, all around how they process their business, are not major technology issues," he said. "Yes, there are some testing issues to make the interfaces work, but the technology is there, it's being used, all the brokers are using it, all the managing agents are using it–they just need to use more of it."

In fact, Mr. Ward added, the technology has been in place "at least since the beginning of this year, and it was available last year. All managing agents and brokers are online, they just need to increase their usage."

For example, he described a common attitudinal problem: "You've got a claim that a broker receives and he says, 'Shall I scan this in, or shall I go and see Jim and discuss how we will beat the U.S. of A. in rugby–and have a cup of coffee and also discuss the claim?'"

Mr. Ward recalled a similar situation during his previous job as CEO of London-based International Petroleum Exchange, where "it wasn't the new technology that was worrying people, it was more the fact that they were going to lose their social club."

Mr. Ward pointed out that the issue at hand is not a lack of trust in technology, but rather "purely a cultural change we need to go through. They've done it this way for 318 years, why should they not do it the 319th year?"

Lloyd's, he added, has to "win the hearts and minds of people and encourage them to see the benefits of going down that route."

What it may take to break old habits and bring about change is a requirement that business be done electronically rather than manually, he said. "We're encouraged by firms such as Guy Carpenter, who said as of Jan. 1, 2008 they will only process claims electronically, so we're very grateful for their support."

One of the technology issues, he said, is contract certainty, combined with pre-bind quality assurance–to make sure that a contract pre-bind is the correct contract.

"We're putting in place various technology tools to enable the underwriters and the brokers to achieve that," Mr. Ward said. This includes quality assurance tools to enable the necessary checks to contracts. The initiative, he said, is "progressing well," and is now included in underwriting standards.

The other component of contract certainty is Lloyd's wordings repository, which contains more than 2,000 model wordings, "so that when you're writing a risk, you can embed standard wordings into the contract," he explained.

The second leg of Lloyd's three-legged technology stool is electronic claims files using the London market document repository. "There we're making good progress, and we've achieved 40 percent new claims processed electronically," Mr. said, noting the target is 60 percent by the third quarter, "which I'm comfortable with."

The third leg involves counting settlements and processing premium-related documentation electronically using the document repository. Here, he said, "progress is not as good as I want it to be. We have a target of April 1, 2008 to have the business processed electronically."

Once the technology initiatives are solidly in place, Mr. Ward said he has a plan. "All the premium-related paper goes down to Chatham in white vans of ours, where it's processed," he said. "What we hope to do is crush one of these white vans and have it mounted as a piece of art in the Lloyd's building. He added that he also would like to feature a pile of claims documentation "sitting there next to the van."