The London Market is losing business on speed, and incremental fixes won’t be enough

Nearly nine in ten London Market organisations report losing business to a competitor in the past 12 months because of operational speed. For 36%, it happens frequently.

That finding comes from new Federato research surveying 245 insurance professionals across Lloyd's managing agents, company market insurers, MGAs, reinsurers, and brokers. The full report, The London Insurance Market's Execution Gap: AI Ambition and Core Technology, examines how core systems affect underwriting speed, AI returns, and competitive position.

The market is investing in AI, and the core systems underneath determine how much of that investment pays off.

At 42% of organisations, strategy takes weeks or longer to reach the desk

Speed in the London Market depends on how fast the whole organisation can act on a decision, as well as how fast an individual underwriter can turn a quote.

Among organisations that implement strategy changes immediately, 59% report losing business on operational speed. Among those that take a month or longer, 100% do. 

Workbenches improved productivity for some, but left the underlying systems disconnected

60% of respondents report improved underwriting speed or productivity from workbenches, and 57% cite better access to underwriting information.

53% of those reporting benefits still cite disconnected systems or heavy integration requirements, and 47% say their workbench added another interface while the underlying systems remained disconnected. Underwriters got faster, and the systems behind them stayed disconnected.

This matters because better decisions need more than faster processing. A workbench can accelerate intake and triage, but risk selection can improve when AI has access to the context behind decisions: policy information, portfolio performance, and claims outcomes. If those live in systems that don't talk to each other, the workbench can speed up one step but cannot supply that context.

AI in production is exposing core system limitations

58% of London Market organisations already have AI in production, led by company market insurers at 64% and Lloyd's managing agents at 63%. Integration is where the difficulty shows up.

Of the organisations with AI in production, 44% cite difficulty integrating new technology with their existing core systems, against 36% of those still piloting. The further AI advances into the business, the more clearly the limits of the core show up. Among organisations using AI in business-critical workflows, 54% report difficulties connecting with broker, bureau, or settlement processes, and 71% have still lost business on operational speed in the past year.

These are the market's most advanced AI adopters, 95% of whom implement strategy changes immediately or within days. Their loss rate is lower than the rest of the market, and most still lose business on speed.

Core modernisation has to fit the way the London Market works

Respondents cited subscription and multi-party underwriting (43%) and multiple systems across the policy lifecycle (42%) as the biggest barriers to core modernisation, with dependence on broker systems, inconsistent data formats, and regulatory and audit requirements close behind. 38% struggle to connect their core with broker, bureau, or settlement processes today.

Business moves between brokers, insurers, and shared market infrastructure, each with its own systems. A core that can't preserve those connections isn't a modernisation candidate in this market. The same connections also feed AI the context it needs: a model that can't see the placement can't improve the decision.

3 in 4 expect that significant core-system work will be needed

76% of respondents anticipate significant integration, modernisation, or transformation of their existing core systems to support future AI and underwriting requirements. Only 24% say incremental upgrades to their core will suffice.

Organisations that have lost business on operational speed are 2.4 times as likely to prioritise a unified platform or policy administration system modernisation. Underwriting and product respondents, who are accountable for risk selection and product performance, are more likely than IT respondents to prioritise connected architecture.

What’s next: 4 priorities 

Modernisation succeeds when an organisation can consistently act on its appetite, write the risks it wants, and respond to brokers before a competitor does. The report concludes with four priorities to focus on next. 

Download the report for the four priorities and full research findings.