Yet another report has been published heralding the massive financial benefits of applying technological innovation in the financial services sector. In this latest analysis, PWC estimates that the UK insurance sector alone would benefit by £49.5bn. This report comes the same week that Lloyd's released its bold new strategy for the future of the market, "The Future at Lloyd's". One of the ideas put forward in this strategy is to split the market in two and allow more standardized business to be placed through a new online system.
The fact that the Lloyd's Market and London Market as a whole needs to modernize to secure its relevance and reduce costs is nothing new. Plenty of initiatives have tried with limited success to crack the enigma of making it easier to do business in the London market. This new flurry of excitement about the future is positive but these statements of intent must be translated into real action.
The prize on offer for those incumbents or insurtechs who are able to offer valuable tools and services to modernize the London market is immense. To achieve this we must not assume throwing the latest technological innovation at the problem is the answer. Technology is a powerful enabler of change but the real challenge is to re-imagine the underlying processes so they can work in a digital environment. If we do this, then as the linked article states, tech could to disrupt the City more than Brexit.
Accountancy giant PwC has a report out today claiming the “technological step-change” now underway, combined with macro-economic and behavioural changes, could herald more than £100bn in new business for the UK’s financial services sector – if harnessed correctly. The pot of potential revenue will be on offer to startups, tech giants and the slightly stale incumbents of each industry, if they get their acts together quickly. Ripe for disruptive innovation are the business models and products on offer from insurance, whose sometimes dated practices were best-symbolised this week by Lloyd’s of London, in 2019, deciding to shift away from paper and offer some contracts online.