In a statement accompanying the company’s annual report, Lloyd’s CEO Patrick Tiernan described the future of market infrastructure as an ecosystem of smart solutions, built on common data standards and interoperability, with new strategies aimed at “raising the bar” and removing friction that limits performance.
The report details Lloyd’s new strategy to strengthen its financial strength and advance its ambition to become the preeminent global insurance risk market.
The strategy was developed after the decision to scrap certain elements of the original Blueprint Two vision, which Tiernan said did not deliver the benefits originally anticipated.
“Exist not to avoid risk but to help those who bear risk – no matter how complex, global or new. We seek to attract the best talent – whether they are underwriters, brokers, capital providers or clients; those who will lead solutions, pricing, terms and conditions, and those who embrace our standards of excellence,” Lloyd’s explained in its annual report.
Tiernan added that while at the helm, his company will create a faster, simpler operating environment informed by principles-based oversight, clearer reporting and more predictable decision-making.
Outlining the four drivers of the new strategy, the CEO said: “First, leading underwriting performance. Sustainable profitability through the cycle remains the primary measure of success. We will promote expertise and underwriting discipline while boldly addressing nascent risks.
“Second, build a more efficient market. We will reduce friction, lower costs and create predictable, risk-based oversight so capital and talent can move quickly.
“Third, maximize our capital advantage. Our unique structure allows a unit of capital to take on more risk than elsewhere. We will protect and leverage this advantage to increase returns for the same level of risk.
“Fourth, create a Lloyd’s of pride. Focus, innovation and talent are not weak ambitions. They are necessities to compete. We will invest where we can increase returns or relevance, and we will stop doing things that do not.”
Tiernan explained that implementation of the strategy will be staged and deliberate, with Lloyds prioritizing initiatives that deliver clear financial benefits and implementing changes within set timescales.
He continued: “The future of Lloyds market infrastructure is not a platform empowered by hundreds of market players – each with different strategies, priorities, systems and suppliers. It is an ecosystem of smart solutions based on common data standards and interoperability.
“We remain committed to supporting the market in rebuilding resilient, cloud-based operating infrastructure that improves operational resiliency and reduces costs. This must be done in phases to minimize disruption to the market.”
Tiernan noted that while Blueprint Two was a courageous undertaking and the company learned a lot, the project did not produce the benefits originally envisioned.
Tiernan continued: “As a result, we have decided to cancel part of the original vision for this project. Since Blueprint Two was first conceived, the technology deployed by market participants has advanced significantly.
“Lloyd’s plays a key role in setting standards and organizing data. Wherever we have useful data, we share it with the market.
“We have a clear understanding of our role as a minority shareholder in Velonetic. We will work closely with Velonetic and our counterparts at DXC and IUA to advance their revised plans.”
In response to news that elements of Blueprint Two are set to be withdrawn, industry leaders weighed in on what the shift would mean for the London insurance market.
Executives from market bodies and technology providers highlighted lessons learned from the program and opportunities for a more practical, incremental approach to modernizing infrastructure and improving operational efficiencies.
Chris Jones, CEO of IUA, commented on the news: “The original Blueprint Two initiative was a wide-ranging set of efforts to achieve the full digitization of London’s insurance market.
“This goal has not yet been fully achieved, reflecting the ambition of the programme. However, there have been some notable successes, including the establishment of core data standards that can be leveraged in the future.
“The IUA will continue to work with its partners to improve market processes in line with new technological advances, while ensuring that existing infrastructure is robust and supportive.
“This has always been a collaborative effort between technology providers, operators, brokers and Velonetic, who will continue to provide critical services to our market.
“As Velonetic shareholders, we are directly involved in developing effective governance for a new approach to digital that makes progress on an incremental basis and minimizes implementation risk.”
Ben Rose, co-founder and president of reinsurance intelligence firm Supercede, said: “Even if the second blueprint disappears, there will be no void. The market has voted with its feet. Participants now want tools they can actually use today, not another decade-long transformation. The industry has shown that it will embrace technology when it improves decision-making without forcing wholesale change.”
“The real success story is Lloyd’s Labs. By opening the door to multiple technology providers, it provides better tools, more choices and faster progress. Market participants can adopt the solution that works for them, rather than waiting years for a single transformation.
“The lesson from Blueprint Two is that the industry doesn’t need another moonshot. It needs tools that make day-to-day decisions clearer and faster. Incremental improvements across the market will ultimately far outweigh the impact of one mammoth project.”
LIIBA CEO Christopher Croft added: “Replacing core systems at the heart of a market is always a difficult task – the IT we rely on today is the product of decades of development, not a simple upgrade. Delivering a new multilateral settlement engine and modern operator backend that truly supports subscription markets is technically complex and operationally demanding.
“Having said that, this work remains vital. The continued delays understandably should be taken by Lloyds and market bodies to take their time to re-examine how best to achieve the outcomes we all need.
“If we are honest about the lessons of the past 25 years, we must ask whether very large, fixed, cross-market projects – which compete with day-to-day company priorities for scarce expert resources – are the most effective path forward. New approaches should consider smaller, modular builds, clearer commercial incentives and governance to drive delivery rather than perpetual delays.
“Now is the time to take stock and should be seen as an opportunity to think radically. The focus now needs to be on practical, market-led solutions that create real commercial pressure to get the job done – because the market cannot afford further deviations.
“As George Foreman said: ‘You can call me old, you can call me fat, but don’t forget to call me dinner.’ We don’t care about the project’s nickname – what matters to LIIBA and our members is that the important work of replacing outdated core systems is being done for the benefit of the market.”
In related news, it was announced earlier today that the specialty insurance and reinsurance market will deliver after-tax profits of £10.6 billion in 2025, an increase of $1 billion on the previous year, with total written premiums rising 4.2% year-on-year to £57.9 billion, reflecting new participation in the market and continued expansion of existing syndicates.
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