Bob James: Lloyd’s prefers sector-wide ‘criticism’ of project delays instead of unsafe Blueprint Two delivery

On 1 July 2024, phase one of Blueprint Two is scheduled to go live. This marks a pivotal moment for the Lloyd’s insurance market as it advances towards a fully digitised operational functionality.

Blueprint Two, originally unveiled in November 2020, is a road map for modernising business models, practices and systems within Lloyd’s. This includes shifting from paper-based processes to instead utilise a digital, data-led and automated approach.

Phase one of the project is focused on building the capabilities required to process premiums digitally, as well as deliver faster claim payments. Phase two, meanwhile, will see the launch of a Core Data Record (CDR) and introduce increased automation.

However, the initiative has experienced a setback.

For example, in December 2023, the marketplace confirmed that following a request from member organisation the Lloyd’s Market Association (LMA), phase two of Blueprint Two would be pushed back from October 2024 to April 2025. 

Back in quarter two of 2023, Lloyd’s had anticipated that phase two would be available in September 2024.

Speaking exclusively to Insurance Times, Bob James, chief operations officer at Lloyd’s, acknowledges the “tattered tale of attempts” surrounding previous digitalisation efforts in the marketplace.

He says: “[It is] important that we have a safe delivery of the technology because this platform processes £115bn of premiums over the course of the year.

“I would rather take criticism on [delays around Blueprint Two’s delivery] then push the date and have a platform that has a flaw, which [would] be problematic.”

James explains that when posed with the dilemma of choosing between meeting a deadline or ensuring the effectiveness and efficiency of the technology platform, “the obvious answer is to deliver the platform safely”.

Digital fear

James believes that the people-orientated insurance industry can be fearful of embracing digitisation.

This is because the sector has historically relied on data stored in physical documents or PDFs, necessitating manual exchanges to complete data sharing.

One such manual process that James has witnessed featured a Microsoft Word document that was converted into a PDF and then sent to Lloyd’s of London’s insurance bureau.

Subsequently, the data was manually entered into a mainframe computer.

Telling delegates about this example at an event hosted by Lloyd’s and DXC Technology on 5 December 2022, James said: “The only thing I could think of that was missing was the parchment paper, fountain pen and sealing wax.”

Two years later and James’ perspective remains unchanged.

He explains that despite the operational effectiveness of Lloyd’s current platform – a 30-year-old mainframe-based system – it is now considered “inefficient”.

James says: “For people that use it on a day-to-day basis, it’s a bunch of green screens that [might have] looked very familiar if we were part of the moon mission from the 1960s.”

Therefore, as part of Blueprint Two, Lloyd’s has been upgrading its mainframe technology stack.

A technology stack refers to the combination of technologies a company uses to build and run an application or project.

The technologies Lloyd’s plans to use include a CDR, to help maintain consistent data standards, as well as the implementation of an intelligent market reform contract (IMRC), which utilises embedded data standards from the CDR.

The CDR will establish a singular, digital version of data for policies written within the Lloyd’s market. James says: “When you consider Blueprint Two and its data standards, one crucial aspect is teaching computers to use a common language. This holds immense benefits in terms of efficiency and effectiveness.”

Blueprint Two additionally includes the launch of a digital submission method – this eliminates the need for paper submissions and enables businesses to submit information digitally.

“Without [Blueprint Two], we’re still resorting to passing physical pieces of paper or a PDF file, both of which are incredibly inefficient,” says James.

He emphasises that Blueprint Two aims to overhaul Lloyd’s of London’s historical reliance on paper-based systems.

James adds: “It’s not about delivering technology – it’s about how we change how we do business in the market to have a data first process.”

Best of both

James explains that often, market participants view using digital and face-to-face interactions as a “binary” choice, holding a fear that choosing digital communications will mean sacrificing personal connections.

However, James challenges this stance – he feels that the use of digital and face-to-face methods is not an “either/or” situation, but should instead be seen as “additive”.

He says that while face-to-face interactions hold impact, they lack efficiency and are time consuming.

Technology, meanwhile, allows individuals to have the ”best of what face-to-face interactions provide” while still maintaining the “instantaneous convenience” of a digital experience.

For James, the digital transformation of Lloyd’s will not diminish the importance of face-to-face relationships, which the industry prides itself on. Instead, Blueprint Two “is going to allow the London market to have the best of both those worlds and to have the balance between efficiency and effectiveness”.