James Kruger: Industry must develop a sense of adventure as client demands increase

The year ahead will be a decisive one for the UK and London market’s efforts to drive digitalisation – but they will need to be adventurous.

James Kruger, UK head of insurance for consulting firm Capgemini, spoke to Insurance Times after the company issued its Top Trends for 2025: Insurance report last week (7 January 2025) and explains that there are clear themes to watch for both personal lines, commercial lines and specialty markets.

Lloyd’s remains behind the curve when it comes to the use of technology, says Kruger, as the Blueprint Two market modernisation and digitalisation initiative remains very much at the drawing board phase.

He explains: “In the past, when it came to the use of technology, retail insurance was always the poor cousin to banking. However, we have seen an evolution in the retail insurance space with the introduction of apps and the online distribution.

“We are seeing price comparison sites looking at how they can offer add on products and services. Looking at the commercial and specialty markets, that is more difficult with different distribution models.”

He adds: “Lloyd’s has been operating for hundreds of years but little has changed. It is still very much paper-based, with brokers moving around the market with files.

“In terms of small to medium-sized commercial risks, such as professional indemnity or public liability, insurers have created sophisticated websites and are operating digital channels. However, the gap between the retail insurance markets and Lloyd’s when it comes to the use of technology is stark.”

Data development

Kruger not that large companies, such as shipping or airline firms, are utilising Lloyd’s brokers to place their risks, but that brokers’ digital systems are not currently properly filtering entered data about clients to those who require it in the market. 

Blueprint Two is supposed to address this issue by creating new data pathways in the market, but implementation has been delayed a couple of times in the past 18 months. 

Proposed new ecosystems would pull in large amounts of structured and unstructured data, which are already available but not being utilised. That technology is, in turn, placing pressure on the market to remove paper from the process.

Kruger says: “Key to the progress of the market will be the core data record – and that should start with the broker.

“There remain frictional costs of doing business at Lloyd’s. It is why it faces increasing competition from the company markets and regional centres, such as Singapore, which are keen to increase their business levels.

“For the London market you have Lloyd’s, the London Market Association (LMA), London International Insurance Brokers Association (Liiba) and the International Underwriting Association (IUA). All these participants have to be considered if change is to happen, and it remains a tricky process.”

However, despite the difficulties of implementing change, Kruger says decision makers are “running out of runway”.

Unavoidable digitalisation

Outside of the London market, Kruger says that there is now a recognition that digitalisation is key to operations, particularly in the personal lines sector. 

During the Covid-19 pandemic, firms operating in this area were forced to examine ways customers could be captured digitally.

He explains: “The retail sector now has a handle on customer centricity. It is now at the point where it is looking to see how it can sell third party products and services.

”Insurers have been able to capture the customer, so it is now a question as to what they would like to sell additionally. The ecosystems are now there which allow the insurer to pull in the data and for it to be analysed.

“It has made a significant difference as to how quickly insurers can sell to the customer and, if they don’t, to understand why.”

Clients demands have also changed in the personal lines sector, however, with many now viewing insurance as a usage-based purchase. As a result, Kruger believes the way in which products are structured will need to adapt.

He explains: “This requires insurers to have the mechanisms to capture the customer. We are seeing the use of parametric solutions, as the next generation of insurance buyers wants to move away from a fixed term product to one based on only when they require it.”

Kruger also says the use of artificial intelligence (AI) and generative AI will have a growing impact on the way insurers operate.

“Automation and the use of generative AI will play an increasing role,” he adds.

“Gen AI is still in the sandbox given we are a regulated business. It is in its elemental form and we will see the evolution of rule around regulatory compliance, but it will be some time.”

While the technology is there, Kruger says the key would be how ambitious insurers will be when it comes to its use.

“Ambitious is a good word,” Kruger he finishes.

“The world and the economy have been hit by the ongoing geopolitical tensions and that has seen a cautious approach from some, but the clients we speak with are still positive. The industry will need to be adventurous.”