Lloyds of London is transforming digitally through the front door

Lloyds of London’s joint venture with DXC Technologies is modernizing the organization by digitizing its largely paper-based analog processes through cloud computing and the transformation of nearly 100 key business applications.

It is part of Lloyd’s Overriding Futures programme, launched in 2019, and will digitize the market “to make it better, faster and cheaper”.

The 330 years old organization, which Marine insurance has its roots in, Still relies on manual, paper-based data inputs and has created a complex web of systems over the years. Its goal is direct processing, which starts with digital data input, replacing manual, paper-based processes. This means a high level of automation from the input of contract information to the provision of insurance.

Lloyds of London, which employs 47,000 people, comprises around 400 insurance companies that underwrite risks for businesses seeking insurance and reinsurance.

In 2019, When Lloyd’s program announced future plansJohn Neill, CEO of Lloyds of London said, technology and Data analysis was a key part of the modernization of the organization. That year, Lloyd’s £300m secured for digital transformation. The first blueprint for The Future of Lloyd’s program was released in September 2019, and its second just over a year later.

In January of this year, the program was described as a “major moment”, a The contract was signed with DXC Technologies “Digitalise, streamline and fully automate processing” for the Lloyds of London market.

joint venture

A joint venture between DXC Technology and Lloyds of London is managing the technology in this program with each company owning 50%. It has 350 people working on the transformation program and a total of around 1,500 IT staff providing IT services at Lloyds of London. It already provided IT services to Lloyds and its structure was acquired by CSC in 2016 when it took over from current IT supplier Xchanging. CSC then merged with HP Enterprises to form DXC a year later.

Joe Rodgers joined in 2019 as Chief Technology Officer for the joint venture. With a background in digital transformation, Rodgers is set to work on how technology enables Lloyds of London to meet the goals of its Future of Lloyd’s programme.

He started with infrastructure. In any digital transformation, cloud infrastructure is a prerequisite and while the Lloyd’s of London IT team was using the private cloud, it soon became clear that more could be gained by using the public cloud.

Rogers’ experience in digital transformation triggered this. “We started with a cloud platform primarily to support development and testing workloads,” he said. “It was originally planned to sit in the datacenter. I came in and we looked at Amazon Web Services’ capabilities in the cloud and we worked on cloud adoption for their core services.

“Lloyds also highlighted this in the blueprint and looked at moving in a public cloud-hosted direction. After taking on the role, we began building a platform for full production on AWS.”

This laid the groundwork for the next step, which would see the introduction of high levels of automation as close to direct processing as possible.

Rogers said the full digital transformation needs to be “a greenfield ground-up rethink of the entire service” that needs to be based on “digital data as input”.

While the cloud provides the infrastructure to support the transformation, the next step towards direct processing is receiving data in digital rather than paper format.

“The main input to the system at the moment is analog, scanned paper copies of contracts, so we have systems to manage this documentation,” said Rogers. “These documents are used to drive a fairly manual business process for claims.

“If it’s a manually scanned document, I can’t really automate that process, because it requires human knowledge to figure out the details of the insurance contract.”

He said that capturing contracts in a digital form is fundamental to automating that process, making it possible to bring in a high level of automation and direct processing.

“We will get a high level of automation, but it won’t be 100% because some insurance contracts are really very complex and demanding,” he added.

As is typical in the finance sector, Lloyds of London is an early adopter of IT, facing challenges in replacing legacy technology. It has a set of mainframe applications sitting at its core and is batch process-driven. Rogers says these are older generation technologies and over time a gradually increasing automation of business processes has been added to various systems. “It has created a heavily complex IT estate,” he added.

Lloyd’s insurance market’s main systems are a premium processing system, claims management system and a centralized settlement service. The project will see the transformation of more than 100 business applications.

wholesale conversion

The transformation will be wholesale and will not just modernize broker-side processes or insurance companies. To this end, there are many businesses that need to change their processes, which means that a gradual introduction of changes will be possible

“We have to deliver this as a transition of service, and we can’t expect all participants to be able to make a massive transition and go digital all at once,” Rogers said. “We are able to support transitional services and we will still support the interfaces that participants use today

“Some groups may continue to use transitional services, but they will not receive the full benefits.”

Rogers says that those who move to a digital interface will have to change to be able to provide digital messaging/input, but they will get the benefits of direct processing at a lower cost.

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