Blueprint Two Phase One Webinar

In this 1-0-1 webinar we provide an overview of Phase One outlining their objectives and implications for brokers and insurers.

Transcript

Jeremy: So welcome everybody, to this webinar where we're really looking at the Blueprint two, and it's a 1-0-1 guide really designed for those who are coming along to the TINtech London Market event to give you the foundational knowledge in order to take part in the discussions next week. But we're hoping that it'll be of interest for those that are new to the subject, or just want to have a recap on what Blueprint Two Phase one is all about, some of the fundamentals around how it may impact your organisation, and also to leave you with perhaps a few questions you might like to put towards your organisation or your management team in order to get the ball moving and make sure that you're ready for when that Blueprint Two comes down the road. So joining me today are Tim Pledger, eAdmin Lead UK at Swiss Re and Greg Brown, Partner at Oxbow Partners, and he heads up the London market there but also an expert in the field so great to have you along chaps. And as I explained, we're looking at kind of the Blueprint Two Phase One. And perhaps, Tim, I could come to you first and just give us a brief intro to what that project, what that initiative is really trying to achieve for the market.

Tim: Yeah, sure. And so I'm sure many of the people who attended this session will recognise that the current solutions on a very old and rather creaky now we get so quite a few incidents taking place generally. So there is a real need to update this central infrastructure and that basically is what phase one is all about. So replacing all of the major applications that Velonetic will use internally, but also involves obviously the connectivity for all of the brokers and carriers that we have. And ultimately, as we move to those new applications, it's going to mean refreshing that the messages that we use slightly and there's a range of EDI messaging use that most of which will be supported going forwards. But there are some unsupported messages which will impact various market participants and then all of the details that are held, the central database, all of the things about the party users and the bank accounts, stamp details, etc., all of those will need to be refreshed.

Jeremy: Right. And Greg, anything to add about kind of the strategic ambition of the project?

Greg: Well, just a bit of background and then probably a lot of people listening will be aware. But this was this is an iteration of an original program set up by Lloyd's in 2019, originally titled Future at Lloyd's. But actually over the years it has been refined and exactly as Tim describes, been focused much more on infrastructure as a phase one. And it went over various iterations of various blueprints and landed on Blueprint two, which is where we are today with the phases of work. Phase one due to launch at currently at some point this year.

Jeremy: Right. And we're going to kind of cover off some kind of foundational fundamentals around phase one with a view to looking at phase two at the at the event. And that's coming up. And I kind of wanted to start with EDI messaging at Tim. Do you want to just tell us what that means and the role of a ACORD in perhaps replacing those messages?

Tim: Sure. So obviously the central service has been around for many years. And then the natural messaging to use at the time, EDI. And there's a whole raft of messages commonly used. And we many of us have been used to the acronyms on the BSMs and USMs, CSMs, SCMs, DSigns, WSETs Since all of those are message exchanges that take place for different activities. But one of the problems that the central services have is that there are so many different versions of all of those and currently there's something around in the region of 130 versions of those messages supported. And so looking to streamline going forward. The interesting bit for Phase two is that ultimately when we come to to that the messaging is going to change to the ACORD URLC messages. And given that there are only five message types, so suddenly we go from 120/130 odd supported messages down to just five that we're all going to be using.

Jeremy: Okay, Greg, anything to add on on the messaging front?

Greg: Yeah. I mean, I think it's it's important that we move to a more standardised way of doing things. The market has historically allowed for lots of kind of wrinkles and bespoke options. I think actually in order to allow the London market to be a truly global marketplace for insurance, aligning with something like an accord standard, which is pretty globally and certainly US well recognised. It's just absolutely critical to allow us to be open for business.

Jeremy: So that brings me on to something else that that may be familiar with people but may not, which is the core data record, the CDR, And perhaps you'd like to just give us a an overview about what that is a bit of an introduction and perhaps what it means for organisations, both in terms of the technology that they might need to start thinking about, but also the capabilities and, and and maybe the training as well that that needs to go into to that. Tim, do you want to start with that?

Tim: Sure or so when the core data record is the database for storing contract information. So, in our natural carrier side of things, the broker will have all details about the contract in their systems, so when they send information directly to us as carriers, we also capture that information going forward. Then we can automate our processes because we both got access to the contact information to validate what we're receiving. That's one thing that currently is lacking in central services. They don't have the contact information. So whenever a transaction comes in, they need to manually look at the contract to validate the information in the messages is accurate. So going forwards and within the placing side, the intention will be that during the placement cycle that data will be captured centrally so that by the time the message flows for premiums and claims, then we'll be able to do the automated processing for central services. So the premium submission, the broker would submit that all the information in there would then be cross-checked against the CDR and should achieve a high level of validation. And on the claims side, we can do some similar checks before providing the claims details to our technicians. The Central Service can do a number of checks and present results to those technicians to hopefully streamline the process.

Jeremy: And Greg, there's there's some kind of issues and challenges around that. Firstly, around getting the the data into kind of that that, you know, where the roles and responsibilities for that. But also there's probably a technical capability that the organisations will need to think about kind of technology capability as well. What's your reading of it?

Greg: Yeah. I mean, absolutely. I'm going to plug a report that we did with the LMA recently on on enhanced underwriting, and we interviewed a big spread of the market. Lloyd's focused, obviously. And actually the number one issue people talked around was data in terms of delivering new models and new ways of distributing products fundamentally and underwriting products. And see, the CDR at the heart of it is an attempt to move from, as Tim described, a siloed world where everyone is recreating their own data individually, which in a syndicated market there's a lot of overlap in terms of data and particularly the value chain brokers through to reinsurers. And I think it's absolutely critical that we get this standardisation of data. And the CDR is exactly trying to do that. But to your point, Jeremy, about some of the challenges, data is often described as an outside problem in terms of its other people. Where the problem lies, it's the distribution partners or whatever it might be. And actually, I think fundamentally, if everyone is saying that, you've got to believe that everyone has issues and I think this will go some way to help people rectify that. But as you say, as you imply, there'll be a lot of internal work for carriers and brokers to do to get the kind of quality of data out. In our experience, we're seeing a lot of good work being done and the quality of the data and data management has significantly increased in recent years.

Tim: I think one of the challenges we face at the moment is that each of us as organisations, captures the data independently. We need to get the data captured by the most appropriate source, a broker enters the initial piece, passes on that information which carries ingest, carriers then do their pricing and pass that information back to the broker. They ingest it, brokers then pass that onto the following carriers, so they're ingesting the same data. So ultimately, we need to get to a position where data is keyed once and used by all to reduce all of the queries and hopefully as part of the CDR piece and what's going on in the wider Rischlikon E-placement environment, we'll get.

Jeremy: Another stakeholder in all of this is that an organisation called Velonetic. And I think they're charged and correct me if I'm wrong with kind of delivering this this kind of digital ecosystem that that we've just been talking about. And Greg, do you want to just give us a bit of background about Velonetic, kind of their role, what it's made up of and and where we are?

Greg: I mean, it's very simple. Velonetic is a joint venture between the market and DXC. DXC provides the current central services infrastructure. And as a result of that JV they will be then delivering the future central services infrastructure and they are currently focused on phase one, which is, as Tim said, a straight, pretty much a straight replacement of the current infrastructure with some tidying up with messages and then also moving into phase two. And it's worth noting that obviously, John Neil, for those that you haven't been paying any attention, John, you'll notice John Neil has said he will be leaving his position as CEO of Lloyd's. So the world will be changing. Phase one has to be delivered. Quite what that means for precisely the timing and nature of phase two. If I was starting a CEO of Lloyd's, I'd probably want to have a kind of think about what I do and where I do that. And and as well, I mean, as we will talk about in a I'm sure the value really comes from phase two. So there's no doubt we need to do some form of phase two. But the original kind of sense that I mean, phase one and then finally shortly after phase two, that world, I'm sure will change. Yeah.

Jeremy: And Tim, this is not just on the placing side, this is also that on the claim side that the Venezia had a building that solutions for this phase one.

Tim: Yes. Velonetic services are more on the accounting side and so premium & claims, they don't really get involved at the moment on that on placing activities. The CDR will be their first interactions there. And so you're very much involved in premiums claims and in the actual movement of money. Central Settlement Facility, which is really the crown jewel, which allows money to be moved between multiple parties at the same day.

Jeremy: Okay. So there's a couple of other areas that I just wanted to cover off. For those who may not be familiar. The first one is how queries are handled and how that might change. And then the second one is kind of the replacement of email delivery. And so perhaps then we'll start with the the first what are some of the changes that people need to be aware of in kind of query handling?

Tim: Well, in today's environment, everything is submitted by brokers and all channels leads to them. The carriers, one of the services on behalf of us as carriers, we get help at the end of all of those activities. So any queries that get raised on the premium side, Velonetic technicians have to raise those queries directly with a broker, regardless of whether it's a broker issue or something that naturally would be with the carrier. So Velonetic may know that it's a carrier problem, but they don't go direct, they pass it off to the broker. When we get onto phase two, it will start off with that same process to allow some bedding in period, but ultimately Velonetic will then be empowered to approach carriers directly. And we have facilities where we can access those queries or get messages on those queries and and resolve them directly. So hopefully it will go some way to speeding up some of that query process.

Jeremy: So, Gregg, organisations need to be aware these changes are afoot and both in terms of communications and responding to them, I guess that's what people need. Yeah.

Greg: And actually most clients that we talk to that need to be aware of are pretty well aware. It's been a bumpy journey I think is and this can be said about that. But I think a lot of people have certainly now very much on the bus. There's obviously frustrations on timing, but I think everyone is is lined up in the way that they need to be lined up. I think the key thing is now we just need to get over the line.

Jeremy: Yeah. So final, final thing. I just mentioned there Tim was the kind of the delivery of the the reports and the changes from from email to just give a quick summary on that, please.

Tim: Sure a lot of the reports and things that we receive from Central Services come via email at the moment. Obviously a push, we just receive them in boxes and many of us have got some automated routines off the back of that. When it comes to the new services, rather than reports going in for email, which is a bit less secure. There'll be a ClickSense product, you know, we'll be able to go and retrieve them. So it will be moving from the a push reports out to we can collect them. So there's going to be some fundamental changes there, obviously impacts the workflow that many moves will have to need to get them before we can actually initiate at workflow.

Jeremy: Yeah. And I think that's the point, isn't it, Greg? A lot of these things are not moving the dial too much in terms of the traditional approach. This is just putting a digital kind of front end and changing, as Tim is saying, to kind of the workflows that people do on a day to day basis. Is that correct?

Greg: I think I see it slightly differently. So in terms of actually a lot of what is being done in blueprint two their other initiatives outlets, but in Blueprint two is very much about the backend stuff and about the backend infrastructure. But where you're absolutely right is that is the starting point as an enabler to allow a digital marketplace and the transfer of data. And one thing we haven't talked about is the kind of digital first versus document first approach. The market has historically been very document driven and building systems around documents. And actually what we need to do now is we need to shift to a data first market where documents can be created, but off the back of well structured data that allows neat flows of data around the market. I mean, you think about pretty much any other market, they are driven by data flows, not by document flows. And I think that's that's absolutely critical. And where we're heading and this is very much about the backend, but about backend to support that, simplify everything to allow. So to create the foundations for digital first and data first marketplace.

Jeremy: Okay, that's great. I think that's everything we wanted to cover off on this webinar to give you kind of the the foundations about what the initiative's all about and some of the changes that will be coming down the tracks. I think. I think we're all agreed. And so certainly from the survey responses that this phase one has got to happen, and I think that was emphasised clearly by both of you as well as the markets as a whole, I think will be interesting when we have the discussion and debate on the day will be how phase two and manifest itself and in what form and and what are the implications for all companies. But for now, thank you. Tim Thank you, Greg. And yeah, we look forward to seeing you at the event.