A call for pragmatic digital transformation in the London market – Ebix Europe

The recent open letter co-signed by Lloyd’s, the LMA, IUA, Liiba and others urging the market to adopt ACORD’s Global Reinsurance and Large Commercial (GRLC) Data Standards felt, for a moment, like a much-needed jolt of momentum for digital transformation.

The tone was right. The intent was unarguable. But it also served to highlight what’s still missing: an agreed vision of what a digital London market actually looks like.

Many of us have been waiting for the follow-up to the campaign that might perhaps start to explain that but I rather suspect that it’s not coming.

ACORD’s GRLC standard is an important enabler of consistency and better data quality. It’s already underpinning some solutions across placement, accounting and claims and has been doing so since the 2000s.

But data standards, while foundational, are not a transformation strategy in and of themselves.

They are tools, not the blueprint. And right now, that blueprint still feels like it’s being sketched independently, market firm by market firm, vendor by vendor, offering differing interpretations of the future.

The London market today remains a hybrid ecosystem. While there is a move towards data-first, digital binding among some broking firms, key pre-bind workflows encompassing almost all submission and negotiation, still lean heavily on analogue, relationship-based practices where email reigns supreme.

Interoperability between tools, systems, and firms remains inconsistent. And few have dared to openly define what “end-to-end digital trading” means in practice.

What’s needed to accelerate digitisation?

First, we must decide how we’re going to approach it. Is the strategy to leave it to the market and see what happens? Or do we want a market-wide agreement on what the end state looks like, and a strategy for how we’re going to get there? Or perhaps a hybrid where the market agrees on certain essential components and leaves the rest to Mr Darwin?

In all of those scenarios, the widespread and coordinated adoption of GRLC will be essential and that means investing in the plumbing: APIs, data validation rules, data governance, testing environments, sandboxes, and so on.

It seems unlikely that all of this will occur by natural evolution as a result of some market PR on GRLC and its benefits, in the absence of an agreed implementation strategy of some sort or another.

It is unarguable that we need an interconnected digital infrastructure that doesn’t demand total reinvention. The London market thrives on competition and decentralised relationships, so any future state must work with, not against, the ecosystem’s complexity.

So the idea of a “digital market” cannot be synonymous with a single platform or monolithic architecture. We’ve tried all that in the past and, aside from the soon to be modernised bureaux, it’s not been hugely successful. Instead, we need modularity, interconnected capabilities built around shared data standards and models.

And that means, to give but one example, that the trading platforms - whether they are market-owned, commercial or broker-owned - need to be able to receive and transmit data in standard formats according to agreed market protocols.

A digital hub, but what of the spokes?

And we need to decide on how far from EC3 the digital market reaches. If you picture a digital London market as a hub in which all appropriate activity occurs in the digital domain, exchanging data between its many participants without the friction of unlubricated, worn bearings, then what of the spokes that bring the business in? Are these to be digital too?

Our spokes reach far and wide, and while many are quite straight and direct to the customer, others are far from it with business making multiple hops to find its way into London. And all of these spokes are utterly essential for bringing the business in and we know that straightening and shortening them (aka disintermediation) is not an option in most cases.

So are they to remain analogue, where email, documents and spreadsheets are as modern as they can possibly get? If that is the case, it seems somewhat unlikely that a digital London market hub can ever operate to its maximum possible efficiency.

And if the entire distribution chain is not to become digital, at what point does the analogue to digital conversion occur? And by whom? And at whose expense and E&O risk? And crucially, digitising the distribution chain means aligning incentives so that all participants in the chain, regardless of size, can share in the upside or who will bother to invest in it?

Oh, and let’s not forget the customer in all of this. Depending upon their size and level of technological maturity, they may well need to be involved too.

So what’s going to be required of them and, somewhat importantly, how will they benefit? I would imagine that they will be reluctant to engage just for the privilege of watching the insurance market make more money while their premiums and customer service remain unchanged.

An AI elephant in the room

And then there’s AI. The elephant in every boardroom. Generative AI, large language models, and agentic workflows promise to help transform the industry.

And you’ll get a different opinion on how that’s going to happen from every person you ask. Some of them may be right but AI won’t be the silver bullet unless the data it consumes is accurate, structured, and validated. Right now, we’re asking it to make Michelin-star meals using ingredients from an unlabelled pantry.

Today’s AI can’t replace standards and strategy. Although some might argue that tomorrow’s AI will, I really don’t think that anyone truly believes that it alone can obviate the need for better data.

The renewed call to adopt ACORD GRLC standards is not a full stop, it’s a comma. The real work starts now. We need to define the end state we’re building toward, co-create an architectural roadmap, and invest in the unglamorous connective tissue of our market’s infrastructure.

If we want a truly digital London market, then the conversation must move beyond exhortation to execution. Standards are the bones. It’s time we built the body.