Music streaming giants’ success is cautionary tale for Future at Lloyd’s – Altus

The rise of music streaming giants such as Spotify and Apple Music could be a cautionary tale for Lloyd’s of London’s vision – the Future at Lloyd’s, according to financial services consultancy and software provider Altus.

The Future at Lloyd’s was launched during May 2019 – it is an initiative laying out  the Lloyd’s strategy to build the ”most advanced marketplace in the world” using technology to futureproof it for the next generation, this includes Blueprint One and Blueprint Two.

Included in the two Blueprint documents are commitments to clear data standards, market super-processing capabilities and automatic claims recognition, among other modernising technologies.

Speaking at the end of June during the London launch of Altus’ whitepaper entitled A Playbook for Transformational Change, Matt Carter, its practice director of the specialty markets team, said: “Lloyd’s needs to change tack.”

He explained that the marketplace had “lost its competitive edge” and therefore needed “proper playbooks to regain it”.

Using the music streaming industry’s rise as a cautionary tale for Lloyd’s, he said a few decades ago people bought vinyl records which was then replaced by cassette tapes and CDs.

Turning to the whitepaper, he reiterated: “Then came the bombshell. The industry was hit by the cataclysmic impact of music streaming. The switch was not just about swapping one medium for another; streaming changed how people consume music and, in turn, how it is made, marketed and perceived.

“Yet even when it was clear that streaming was going to transform the industry, many left it too late to adapt and remodel. The vinyl market still exists of course; and for purists, collectors and DJs, vinyl remains the medium of choice. However, it is a quaint corner of the market that has been changed beyond all recognition by the streaming giants.”

Outdated vinyl

The whitepaper poses the question – could Lloyd’s become an LP record in a digital streaming world? And is the market doing enough to keep up to date?

It stated: “We know that Lloyd’s continues to retain its position as the world’s leading specialty market, but we also know that it’s still reliant on broadly manual processes and traditional ways of doing business, making it a relatively costly and time-consuming place to do business.

“There are positives to the tried-and-trusted ways of doing things – just as there’s much to be said for the smooth tones of vinyl – but that isn’t enough to halt change. Sometimes ease of access, convenience and cost are what matters most to customers. Are market participants doing enough to move with the times?”

Altus predicted that there are about five to ten years left for the current business model to function “before it begins to slide” into a more minor role or irrelevance.