London market firms are ‘leaning into the need to move to a digital marketplace’, causing a technology ‘revolution’
The demand for a digital marketplace has “become completely transparent” following the Covid-19 pandemic, as some London market firms continue to struggle with “old and creaking” legacy systems or an administrative backlog after face-to-face collaboration was put on pause in 2020.
This is according to Andy Moore, partner and Lloyd’s and London market leader at professional services firm PricewaterhouseCoopers (PWC).
Speaking exclusively to Global Reinsurance at the Rendez-Vous de Septembre conference in Monte Carlo this month (September 2022), Moore explained that the “London market has a massive legacy technology debt” that really came to the fore because of the Covid-19 pandemic.
“So many people have old and creaking systems that they haven’t invested in to move them forward,” Moore said, adding that there are still a number of systems that are not cloud enabled.
In his experience, tasks such as technical accounting are very difficult to perform while homeworking via a legacy system because staff often do not have remote access to admin systems and interfaces.
Moore continued: “A lot of people, therefore, when faced [in] March 2020 with the message of ‘you shall work at home, you shall not leave your house’, they were really nervous about how they were going to keep their businesses working.”
Although London market firms subsequently “worked really hard” to ensure their businesses could operate in the pandemic environment, which included connecting employees and clients to facilitate communication, Moore added that there were still “problems that were only solved [by] people being in rooms together”.
During 2020 and 2021, when face-to-face business meetings were impossible, this lack of in-person problem solving “mounted” and now “a lot of insurers have got the administrative challenge of catching up on that backlog”.
Moore added: “The big challenge at the moment is everyone is now leaning into the need to move to a digital marketplace.
“The shift that they need to make in some circumstances - it’s not an evolution of where they were before, it’s a revolution.”
Moore believes that one positive which arose from the pandemic is that “the need for a digital marketplace become completely transparent to everybody”.
He explained: “People who thought they didn’t need to innovate because this is a face-to-face marketplace, it’s person-to-person businesses [and] technology was there just to serve that, have realised that because the world is now virtual, or part of the world is hybrid, we have to have digital solutions because otherwise, you will fall behind.
“You won’t be able to keep up with efficiency. You will become less relevant and some people will just exclude you if you can’t do business in the way that [they] want to.
“If you can’t do instant, straight through business, why would people include you if you’re going to make doing business harder than it would be in other marketplaces?”
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London market still catching up on admin backlog caused by pre-pandemic ‘creaking systems’