Finding the perfect fit of technology and people power is difficult, says Gregory Maciag.
Change. The London market resounds with the sound of that word. Changes in regulatory oversight; capital management; corporate governance all the way through to core business processes like placing and claims management. Change is good… right? Or to qualify that: change is good when it's good for people.
There is a decidedly electronic face to the change that is upon us. It will remove paper, it will automate all manner of business processes, accelerate capital flows, improve business reporting and even improve risk modelling and ultimately underwriting. How does all this sit with the London market, a market that is above all a social construct where business is conducted face-to-face and personal relationships remain the bedrock of any career? Systems professionals from other industries look at the legions of brokers striding through the narrow streets of EC3 weighed down by paper files and are dismayed. They see expensive and time-consuming manual processes, not the efficiency of modern B2B exchanges.
However, the London market is not a commodity market. It's not a place where anonymous people gather to exchange value based on a shared understanding of simple public information, often expressed in prices. It is the reverse. People who know each other very well come together to make deals around unknowns. Their market is faced with risks the world has never seen before, and does not know how to price. In London there is massive value in the human network.
Change will succeed where this human network is served by new technologies that create greater connectivity, enabled by data standards and standardised and globalised business processes. Companies and markets that make judicious use of systems can score efficiencies in their “business-as-usual” lines and free up human resources to develop their “business-as-unusual” lines.
This is the way information-intensive industries like insurance evolve. They commoditise today's high-value, one-off deals into tomorrow's business-as-usual. The process just happens much faster these days.
The resolve to make this market an open, highly efficient and flexible insurance market is in good supply. There will be missteps – even oversteps – but good change is coming and must come.