Lloyd's of London - the oldest continually active insurance marketplace in the world - is reaching its insurance data vision through the efforts of its data lab
Lloyd’s of London is a marketplace that pools together insurers to cover areas as diverse as ships, satellites and even David Beckham’s legs – but these larger risks come with an equally huge amount of insurance data.
The organisation includes more than 80 syndicates – or member insurance and re-insurance companies – which, as of 2017, wrote a combined £33.6bn in gross premiums.
As the oldest continually active insurance market, it might be readily assumed that the processes managing much of this information is antiquated.
At the Gartner Data and Analytics Summit in London this week, one observer described Lloyd’s as not being known for its “adaptability” or “agility”.
According to two of the organisation’s speakers, this was certainly the case before it recruited a team of data experts to change this.
Head of data strategy Waseem Ali says: “When we started in 2016, we conducted a current state analysis and set up a vision to open up the scary ‘black box’ called data.
“We started by creating dashboards for areas of the business like broker management and the finance and procurement team, which helped us to demystify data.
“The data lab created a data business partnership and engagement model, and in 2018 we launched our first external product – the Lloyd’s City Risk Index.”
Lloyd’s of London staff had to become data literate
Microsoft Excel has been the preferred data management tool for businesses everywhere for years – and insurance is no exception.
But thanks to advances in analytics software, businesses now have the capability to compile and present their data in dashboards with much less effort than it would take to create Excel pivot tables.
According to Mr Ali, the initial challenge for the data lab was educating staff about the capabilities available to them and prying them away from Excel workbooks.
He says: “Those that know Lloyd’s will know it’s very paper and Excel-based.
“In fact, the head of data governance was ripping his hair out over the amount of Excel spreadsheets that existed.
“We had a choice between calling a spreadsheet amnesty and getting staff to bring us their data and let us sort it out for them, or we could engage them and try to open up a conversation about data – we tried that.
“We started to advertise discovery sessions – something I learned from the CDO of Lloyd’s Banking Group – we told anyone spending time pivoting their Excel data to give us an hour of their time to show them value from our technology stack.”
Data literacy was a significant goal for the data lab and the discovery sessions started a process that progressed to enrolling staff on online courses created in collaboration with external organisations.
Mr Ali describes the discovery sessions as “zero-level training”.
The next step was more face-to-face training, online courses and collaborations with the Open Data Institute – an organisation that works with businesses and governments to improve their data capabilities.
After seeing an interest in data science within Lloyd’s, the data lab teamed up with the University of Southampton to launch a data science curriculum, which didn’t initially attract much interest.
Mr Ali says: “We launched the curriculum as an experiment last year and had about ten people enrol.
“This year, we thought ‘we’re not going to have many people interested in this course, so maybe we’ll just run one mid-year’ – to cut a long story short, we’ve had 40 people enrol.
“From this, we realised we’ve got these hidden data people across the organisation that we’re now bringing together through education about data science.”
Lloyd’s of London insurance data lab proved the value of data science
Global research and advisory firm Gartner advises businesses to put a chief data officer in control of their data and bring the workforce into the process of data visualisation, to help create dashboards and enhance their understanding.
Despite this advice, much of the business intelligence process was the remit of the IT department at Lloyd’s before the data lab stepped in.
Nick Blewden, head of data product development for Lloyd’s, says: “The business intelligence element was within IT, and although they had agile technologies like [data visualisation platform] QlikView, there weren’t many dashboards and people didn’t really understand the value of using their data.”
The data lab put all the premium transactions of Lloyd’s over the last 13 years into one dashboard and gave it to the business development team, doing the same for finance and procurement – the area of Lloyd’s concerned with cutting costs.
Mr Blewden explains that although these projects helped the data lab gain credibility, it didn’t come without its challenges.
He says: “For the first time, they had such richness of data for their area, with the ability to cross compare figures between countries and areas – that really got their attention for the first time.
“But when we started to speak to some users, they said things like ‘I don’t need all this, I need a table, I like Excel and I’ve got Microsoft Power BI on my desktop, I can move my table there’.
“We put all of their data together, automated it on a daily basis, gave them the insights they wanted and put them on a website so that everybody could see – at this point they said ‘now I get this, it’s taken all the manual effort away’.”
This turning point began to give Lloyd’s data lab credibility in the organisation, and now 65% of its staff are using software like Qlik Sense – Lloyd’s data lab’s preferred data visualisation software.
AI reduces response time for Lloyd’s of London regulatory advice team
Artificial intelligence is an important opportunity for businesses looking to speed up processes and for Lloyd’s, this was the “final string to the bow” in the process of becoming a data-driven organisation.
Mr Blewden explains that Craig Civil, Lloyd’s head of data innovation, led a project to implement AI within Lloyd’s International Trading Advice (LITA).
LITA is a consultancy within Lloyd’s that gives insurance companies regulatory information about the countries in which it operates.
Mr Blewden says: “There are more than 200 geographies within Lloyds, each with their own regulatory rules and conditions, and we get a lot of questions about compliance and conditions within each area.
“So we trained an AI natural language processing model to learn the English language to start with, then insurance language, and then language specific to Lloyd’s insurance claims.
“We fed it all the regulatory advice for Australia to start with, and then we deployed it so that when we receive a question from the market, the AI then finds the article, finds the relevant information and then gives an answer to the support team.”
Despite a general fear across all industries about the implementation of AI leading to job losses, Mr Blewden claims the LITA team is assisted by the AI – not replaced.
“What we haven’t done is sack a load of people in our support team, what we’ve actually done is enabled it to scale across more geographies and actually respond faster,” he says.
“The average response time was four days, and now it’s down to one day. We’ve been able to cover a lot more geographies than we used to with that service.”
Lloyd’s of London insurance data lab will bring products to market in 2019
Lloyd’s data lab launched its City Risk Index – a public website created using Qlik Sense software – in May 2018.
The website allows anybody to look at the risks associated with 279 cities around the world.
Looking to the future, the data lab intends to use the advantages gained from partnering with data management and visualisation software providers to provide products to its syndicates.
Mr Blewden says: “We’re launching a whole portal for the Lloyd’s market so that brokers and managing agents within the Lloyd’s market can see opportunities to grow their businesses.
“Our more comprehensive City Risk Index Plus will allow users to see what the tax and regulatory rules are within each area, as well as socio-demographic and macroeconomic information that will help them identify opportunities within each country.”
As well as helping its syndicates assess the landscape for each insurance market, Lloyd’s data lab will also provide tools such as My Portfolio that allow them to assess their performance within its market and make comparisons with each other.
“The My Portfolio view will allow users to see the business they do within Lloyd’s, areas like their premium flow, how many claims they’ve had and their level of profitability,” adds Mr Blewden.
“From here, users can benchmark against their peers for things like the lifecycles of claims payments.”