Driving Competitive Advantage in Delegated Authority
The Delegated Authority Problem
As we enter 2025 Delegated Authority Transformation appears to be a hot topic for all CEO’s, COO’s and CUO’s across the market.
Representing over 40% of the Lloyd’s market, with an expectation that the percentage of market premium will only get bigger, Delegated Authority is not only a growth opportunity, but given the complexities of operating in this space, cost and efficiency savings are also on everyone’s radar.
The beauty (and curse) of Delegated Transformation is that it’s a firm wide initiative that cannot be done in isolation. It is not just the responsibility of your DA Team, but is all encompassing involving Underwriting, Claims, Risk, Compliance, Governance, Technology and Data to name just a few. In our experience from 2024, the stakeholder management needed to undertake such an initiative is extensive, the transformation solution needed is even more complex and multi-faceted.
Market Initiatives
In addition, Lloyd’s have initiated a number of market initiatives over recent years including DCOM/DDM, LMA DARE and computable contracts as well as the more recent DA streamlined compliance initiative. The trend in 2025 however appears to be that whilst firms are keeping one eye on what Lloyd’s are doing, they are forging ahead to gain potential competitive advantage over their peers, and that those who commenced transformation activities during 2024 are well ahead and leading the charge.
Whilst the market recognise where the end state needs to be with digital transformation of information from Coverholder right through to capacity provider, the path to success is unclear. At GreenKite we have been actively working with our clients to drive improvement in their DA capability and believe in building a strategic roadmap which adds value along the journey, not just when you reach the final destination.
From GreenKite’s experience of working with clients in 2024 here are our top 3 recommendations before initiating DA transformation:
Where is your competitive advantage in DA coming from?
Do you want to be a delight to do business with, are you targeting niche business to drive profitability, is digitisation, data and AI where you will outperform the rest of the market. The answer should be driving your strategy to ensure you realise the commercial benefits and help focus your transformation programme.
Develop a DA operating model to support your overall strategy
DA operating models are traditionally manual and expensive. Outsourcing has long been seen as the enabler for cost reduction, however is often poorly implemented requiring significant intervention. Think strategically about which operating model capabilities drive your bottom line, and think innovatively about how to do things differently in a digital world.
Technology is the great enabler for DA, but what are you trying to enable?
DA has historically been the poor relation in respect of technology solutions. Firms remain unable to efficiently and effectively capture DA business within traditional underwriting systems and accurately monitor EPI. The evolution of bordereaux management solutions in which significant effort is made to process the data, only to find the data is unusable for reporting, still remains a challenge for the market. With the evolution of GenAI, the technology landscape is changing and both insurers and vendors must embrace this change. However, for GenAI to be the answer you have to have a clear idea of the business problem you are trying to solve.
GreenKite often see firms dive straight into the DA problem as they see it, rarely do firms take a step back and take a critical look at their overall capability in Delegated Authority, identifying their strengths and areas for improvement. The value of a capability assessment to drive transformation should not be under-estimated, it provides the basis of your business case and helps drive the agenda for change. It enables focussed discussions at senior level about a firms core business priorities and allows them to focus scarce project resources to the areas which can drive competitive advantage.
At GreenKite we support businesses in all aspects of Delegated Authority model improvement. If you would like to discuss how we could support your business’s approach to DA, please reach out to Karen Stanford, CXO and DA specialist at [email protected]
