Sharing Risk For A Braver World. The Future At Lloyd’s

Blueprint TwoSharing risk for a braver world.The Futureat Lloyd’s

1234Introduction and overviewForewordIntroduction to Blueprint TwoChapter 1: Blueprint Two – the big pictureChapter 2: Delivery planning and approachChapter 3: Look back to Blueprint One03The Future at Lloyd’s customer journeysChapter 4: Open market placing journeyChapter 5: Delegated authority facility and risk placementChapter 6: Digital processingChapter 7: Open market claims journeyChapter 8: Delegated authority claims journey36Foundations of our future marketChapter 9: DataChapter 10: Technology79Engaging with the marketChapter 11: How you can get involved98

1Introduction and overviewSection 1Introductionand overview03

1Foreword04Last September, we published our vision for the Future at Lloyd’s throughBlueprint One. This second blueprint brings those ambitions to life anddetails the tangible solutions that we will deliver for the market, as weaim to become the world’s most advanced insurance marketplace.A lot has changed since the publication of Blueprint One. The world isnow a very different place and, despite great adversity, the market hasresponded well and has proven its resilience in remarkable ways. Thepandemic has demonstrated that we can adapt and do things differentlyand, if anything, has only increased our ambition for what the marketcan achieve. With that in mind, we have pushed ahead with the sameunderlying concepts and maintained the ambition laid out in BlueprintOne, whilst also refocusing and adapting our approach, informed byextensive research, consultation and feedback.Blueprint Two is a challenging two-year programme that will deliverprofound change for the market. We will establish new ways of doingbusiness, underpinned by digital channels that enable advanced datacollection and management. We will create solutions that will enablebrokers, insurers and partners with delegated authorities to operate ata materially lower cost, which we estimate to be at least 800m.We will execute this within a two-year timeframe and undertake morework to quantify and illustrate other ways in which we can streamlineour activities and improve the experience of all market participants.So, what can you can expect?— An intuitive, straight-through process for placing and binding risk:enabling growth through global reach and easier access to newproducts and services— The ability to identify a valid claim on notification: enabling claimsto be tracked throughout their lifecycle, resulting in a much fastersettlement time and improved customer experience— A right first-time mentality: radically reducing lead-times and errors,driving cost benefits for everybody in the value chain— A first class, digital marketplace: data-driven and digitally enabled;this is how we’ll create the most advanced insurance marketplacein the worldBlueprint Two represents a huge collaboration between the Corporationof Lloyd’s, insurers, brokers, market associations, customers, suppliersand many others. Your responses have been overwhelmingly positive andhave enabled us to develop the solutions for the Future at Lloyd’s. Thankyou to everyone who has contributed and helped so far – and thank youto everyone who will be involved in bringing these solutions to life.

1Foreword05In Blueprint One, we set out four key goals: offering better solutions tothe risks faced by our customers; delivering better products and servicesto our customers and capital providers; simplifying the way we work bybeing more efficient and reducing costs; and building an inclusive culturewhere everyone feels valued. Blueprint Two builds on those goals, bydetailing the digital-led change and execution plan that will transformthe way in which we operate.I know we have the appetite and energy to execute our plans for thefuture and in doing so, we have the makings of real, transformationalchange. Blueprint Two is our roadmap to get there, but it is going totake all of us to succeed. Let’s make it happen together.Bruce Carnegie-BrownChairman of Lloyd’s

1What Blueprint Two isIntroduction to Blueprint Two06Blueprint Two sets out the details and plan to deliver the secondphase of the Future at Lloyd’s: our strategy to build the most advancedinsurance marketplace in the world. It is a plan to deliver our updatedpriorities over 2021 and 2022, building on the progress we have made.The following pages describe how we will digitise much of what wecurrently do, which parts of the Future at Lloyd’s we are prioritising andwhy, what we will deliver as part of each workstream and when we intendto launch each solution. Blueprint Two also clarifies those areas wherewe need to carry out further research and experimentation to developthe most effective solutions.Blueprint Two helps our market participants and other stakeholdersunderstand what needs to be done over the next two years in termsof change management to ensure they realise the full benefits of thenext phase of Future at Lloyd’s developments.What Blueprint Twowill deliverThe primary goals of our ultimate customers is to get covered andrecover from a loss – these goals have driven our work on Blueprint Two.Our approach, therefore, is to deliver change based on end-to-end userjourneys, delivering improvements and efficiencies towards these ends.Blueprint Two focuses on two core placement types – open market anddelegated authority business – which between them account for morethan 80% of the value and 90% of insurance contracts placed at Lloyd’s.In the following pages we describe how we plan to redesign the twoinsurance transaction processes that make up these journeys - fromplacement through to accounting, payment, endorsements, claims,renewals and reporting - to deliver the seamless end-to-end processesour stakeholders asked us for, and which will be a fundamentalcomponent of our new digital market.Our market participants and stakeholders told us we had to focuson fixing the disjointed processes and technology used in placementand claims and should make them seamless end-to-end experiences.They reinforced the importance of using data and technology toincrease efficiency, reduce expenses and improve the user experience.They also confirmed their support for our ongoing work on people andculture, one of the critical foundations of the Future at Lloyd’s.

1Introduction to Blueprint Two07Building for Lloyd’s AND the London marketAll of the proposals set out in this Blueprint have been designedfor Lloyd’s participants recognising they form part of the widerLondon insurance market, often as part of larger insurance groups.The proposals therefore seek to avoid “Lloyd’s-isms” and insteadbe available for and accessible to the wider London insurancemarket. We see that as essential to avoid separation of processes,duplication and additional cost. It is also essential to encouragemarket adoption as we completely understand that brokers andinsurers do not want to have to use separate processes and systems.We will engage with broader stakeholders in the consultation anddevelopment work as we deliver Blueprint Two.Our design principlesWe created a set of design principles, in partnership with marketparticipants to help us align around what matters as we shapethe new experiences, solutions and services.1. Build for the entire market - Designing and building solutionsthat improve the experience of informed, expert marketparticipants2. Customer at the heart - Open and flexible to enable customersto interact and transact in a way that works for them3. Simplify complexity - Making it easy and getting it right firsttime. We will deliver value through high volume classes ofbusiness first4. Data at the core - Use data to inform how we design oursolutions/products. Focused on quality, accuracy and speedof data flowing through our systems5. Design for value - Deliver fast, test throughout, iterate andscale – regular and timely delivery to the market6. Foster trust through transparency - Open communicationand working together to forge strong relationships and betterproducts7. Design for the future - Experiences underpinned by openand flexible architectures that are seamless, efficient andfoster innovation8. Think Global - Design solutions with Lloyd’s global reach in mind

1The benefitsdelivered byBlueprint TwoIntroduction to Blueprint Two08The Blueprint Two solutions will offer market participants the opportunityto innovate in the way they serve their customers, and operate moreefficiently, at a lower cost base – better, faster, cheaper.We estimate that brokers and insurers could collectively reduce costsby over 800m (representing around a 3% reduction in operating costs)through greater efficiency, reduced bureaucracy and automation. Thistotal is based on research carried out with a sample of managing agentsand brokers, looking at their current processes and costs and workingout how much these reduce if they adopt all the Future at Lloyd’ssolutions. It carries with it two caveats – that market participants adoptthe solutions in Blueprint Two and that the current distribution modeldoes not change.As well as direct cost savings, these efficiencies will enable marketparticipants to spend less time on non-value-add administrative activityand more on value-add activity that improves customer outcomes,including more time spent on developing a broader range of new,innovative products and services that closely align with customers’ needs.The work will be funded by the debt we raised in early 2020.TransitionOur approach to transition between current systems and processesand new digital services will be based on two key principles:1. Collaboration with market participants, using an iterative test andlearn approach to the development process. This will allow us toensure that services to be developed and transition plans to bedeveloped can progress in the optimal way for market participants.2. Simplicity, using common systems and processes to interface bothnew and old services to avoid dual running wherever possible to keeptransition costs low.Given the complexity of our market, transition will be done in a measuredway over time starting within the next two years.Building the most advanced insurance marketplace in the world willrequire new skills and ways of working in order to be successful. Ourcollaborative approach will be based on making the most of the worldrenowned talent we have in the market and also bringing in new, worldleading talent and skills. Our approach will be people-centric, open,inclusive and transparent – building the future culture of the marketas well as the systems and processes.

1Introduction and overviewChapter 1Blueprint Two –the big picture09