London Insurance Market is the oldest market in the world. There are two classes of people and firms involved in the markets: insurers or provider of capital, and brokers or intermediaries between customers and insurance company. In order to be sustainable and efficient, the London Insurance Market is making great changes in such a complex business environment. The problem is that the London Insurance Market systems and practices have remained unchanged for hundreds of years; changes are not easy to make for its modernization.
According to the case, London Market Group took it step by step. It introduced three developments including electronic filing cabinet IMR and new claim system including ECF and eAccounts. In order to convince senior management, LMG then asked to set up Finish What Weve Started work to help the implantation of modernization program. Besides, LMG chose bottom up approach, which effectively helped every employee be involved in the new system, especially the end users. Both top management and bottom employees were working together to achieve their goal.
The London Insurance Market have benefited a lot after adopting these new developments. For example, electronic claims take less processing time than before. Besides, according to the case, the return on investment was estimated to be 16%. The disadvantage of making changes is that it takes time and effort for employees to get used to the new electronic processing system. The companies also have to spend money to provide such training courses.
The London Insurance Market can also choose to do nothing and maintain the current system. After all, these systems and working practices have been functioned well for over three centuries. The advantage of this alternative is to lower the companies budget. Companies dont need to spend much money on introducing the new program, and employees dont need to spend time and efforts to learn how to operate a new system. However, this alternative also has disadvantages. Under such a fiercely competitive business market, staying unchanged is not a smart choice, especially in insurance market. Nowadays, doing business globally and internally isnt unusual cases. Traditional ways of processing settlement of premium or claims would be time consuming and costs.
Between the two alternatives, I prefer the first one, to make the changes. If a market wants to be sustainable and prosperous, it has to constantly make changes to adjust to the complex business world. Making the first step out is always hard, but once everything is on its track, it could benefit a lot.
For London Insurance Market, making changes appears to be impossible at first, but with the right program management tools, I think modernization became their best choice and went smoothly. The market is more efficient, and stakeholders have more confidence than before. I believe it will make continuous changes in the future.