How partnerships with insurtech can deliver rapid benefit to the market

Every year, we see the huge impact that natural catastrophe events have on communities – from the devastation of hurricanes in Florida to the destruction of wildfires in California. This is where Lloyd’s promise to pay valid claims and help our customers in times of need really comes to the fore, and one of the reasons we appointed Carey Bond in August 2020 as a dedicated US Head of Claims.

While we remain focused on handling these claims, understandably the local regulators need a lot of information from our market and our claims partners on the ground to track progress of the claims. Given these requests for information need to be handled at the very time that we want our market focused on supporting customers, we aspired to find a solution to make sure both regulatory reporting requirements were met whilst minimising the reporting burden on the market.

For this reason, we were delighted to discover a new reporting portal for catastrophe data identified by the Lloyds Lab - a 10-week programme that sees Lloyd’s partner with innovative start-ups to identify and leverage insurtech solutions that could add value to the Lloyd’s Market – resulting in a reduction of more than 13,000 hours of data entry per year.

The story starts in late April 2020 and is a great example of how the Future at Lloyd’s programme is working with innovative SMEs to quickly introduce digital solutions that can add immediate value to the market, in this case by significantly reducing the administrative burden across all stakeholders in the catastrophe regulatory reporting process.

Optalitix, a London-based artificial intelligence (AI) software company, joined the fourth cohort of Lloyds Lab, a 10-week programme that sees Lloyd’s partner with innovative start-ups to identify and leverage insurtech solutions that could add value to the Lloyd’s Market.

For the Lloyd’s market, profitable underwriting depends on continually improving the tools and techniques used to select and assess risks, manage risk portfolios and optimise the claims handling process. One of the themes for Cohort Four was ‘Data and models’, such as data-sharing solutions that could reduce the burden on customers to provide us with data.

Technical Claims Manager Martin Canavan was keen to find a less time-consuming method of capturing and collating regulatory reporting data following catastrophes. There has been a steady increase in the amount of data requested for each catastrophe, coupled by a rise in catastrophic events worldwide. Together this has created quite a heavy administrative burden – thousands of hours – on all those involved in the Cat reporting process. By increasing direct involvement from service providers, in particular DCAs, for reporting requirements we continue moving towards a more efficient model, reducing the amount of time and effort required – both for Lloyd’s and the market as a whole.

One of Optalitix’s products enables insurers to submit complex data intelligently and simply.  Head of Innovation and Lloyd’s Lab mentor Craig Civil immediately saw the potential for matching this solution to Martin’s market reporting problem.

In the last few weeks of their time in the Lab, Optalitix were set the challenge of creating a proof of concept (POC) version of their data collection product that could help reduce the Cat reporting burden, a challenge they accepted and delivered on rapidly.

Within just over a week they had developed a rapidly deployed POC reporting portal, which Craig and Martin reviewed and tested. The work was so impressive that Optalitix were authorised to create a full-build version in October 2020, with a view to having a working product available to market users by the end of the year.

Optalitix built the new catastrophe reporting portal using an agile methodology over two months including extensive market input. The portal was tested by a small sample of market representatives at the end of the year.

The portal is now live, with more than 180 users signed up for licences to use the portal, and it is estimated that the new portal will save Lloyd’s and the market over 13,000 hours a year in data entry admin, allowing for more value-add, customer-facing activity

The data platform is open-architecture and flexible, which means that it can be adapted to align with future developments in the digital claims journey.

Watch our video to follow the journey, and for more information or onboarding instructions, please email Catreporting@lloyds.com.