Accelerating ‘data-first’ in pre-bind processing to unlock the potential of Blueprint 2
As we lower the landing gear for the final approach to Blueprint 2 Phase 1 go-live, firms will be well advanced in preparing to adopt the new ways of working that start in July.
Thoughts will start to turn to Phase 2 and the exciting new trading environment enabled by the Digital Gateway and other solutions that will facilitate full digital placement of risk for the very first time.
One of the most exciting parts of the Blueprint 2 vision is how it’s expected to drive the transformation to a ‘data-first’ approach to trading, away from today’s manual, document-driven processes. Standardised data in conjunction with digital messaging and the new central services will truly transform the industry.
But what does being ‘data-first’ mean in practice? Does the Blueprint architecture facilitate this? And how can market participants start getting ahead now to prepare for a data-first market?
Let’s start with some definitions
‘Data-first’ is the concept of extracting risk information from submissions and transposing it into standardised data entities that can be shared between organisations and systems through APIs, enabling highly efficient, ‘data-first’ risk placement and processing.
‘Document-led’ on the other hand is today’s paradigm for most of the market – risk data is populated into documents such as MRCs which are sent along the value chain and the data contained within them rekeyed into subsequent systems in the chain.
The former approach has many clear advantages in terms of efficiency, accuracy and speed, as well as enabling greater manipulation and enhancement of data for deeper risk insights leading to better underwriting. The Blueprint 2 vision is for market participants to move to data-first as quickly as possible and eventually decommission non digital routes.
Data-first is a pre-bind challenge
But whilst the aspiration is towards data-first and elements of the target state Blueprint 2 operating model necessitate it, there’s actually little within the Blueprint 2 architecture that helps market participants move to this approach.
MRC v3 and the new Core Data Record (CDR) are certainly part of the solution and will help standardise data across different actors in the value chain. But the CDR is merely a set of defined data entities that must be captured through the pre-bind process – and in fact just the sub-set of entities needed to enable four post-bind processes through the Digital Gateway (accounting and settlement, tax, regulatory reporting and first notification of loss).
In other words, whilst the CDR might require a data-first approach to pre-bind, and the MRC v3 might help to enable it, they are not the complete solution. Because the MRC and CDR contain only a partial record of the risk, using their requirements as the specification for pre-bind data capture certainly wouldn’t enable a fully data-first approach to submission, quote and bind. Which would seem like a missed opportunity.
And whilst placement platforms have an important role to play in digitising the placement process, these too will need to evolve to be ready to support brokers and insurers who are ready to trade on a fully digital basis – for example automatic creation of MRCs using data entities extracted from the submission and sent via API to the placement platform.
Data-first starts at submission
Market participants need to think about how they will implement a data first approach, not just to be compliant with CDR requirements, but to take full advantage of the opportunity to transform pre-bind.
And there’s an easy, obvious and highly valuable place to start.
A key capability of data-first is automated submission ingestion. Using AI to extract targeted risk data from voluminous submission packs, standardising that data and converting it into the correct format to be ingested by downstream systems and then pushing it directly into those systems through APIs is the foundation of a data-first process. Data-first without automated submission ingestion would be like using a starting handle to fire up a rocket ship!
Automated submission ingestion is not new, but previous AI based solutions have required lengthy and expensive algorithm training and implementation projects which has often killed the business case. Now a new generation of solution has arrived led by mea Platform which is fully pre-trained, works immediately and is available as SaaS.
Such solutions are driving significant business value right across the market – carriers are transforming their back office, MGAs are winning more business through faster speed to quote, brokers are automating the creation of market submission packs.
And crucially, automated submission ingestion unlocks a data-first approach to pre-bind processing and accelerates the requirements and vision of Blueprint 2.
Let’s go back to the CDR. There’s currently no consensus approach nor solution to how the CDR will be created. Perhaps the easiest and most obvious option is to extract the relevant data from the MRC v3, but there are two problems with this: (i) the MRC doesn’t contain all of the data required by the CDR, which means that data not in the MRC, for example in SOVs and tax schedules, will need to be extracted and added manually; (ii) it assumes that data has been correctly populated into the MRC in the first place.
A next generation submission ingestion platform can solve this – automatically extracting targeted data entities from submissions, populating the MRC correctly, extracting additional data not included in the MRC but required by the CDR, and sending it all through an API to the CDR, either via a placement platform or directly.
Now is the perfect time to take the crucial first step towards data-first pre-bind
The technology is ready. The business case for submission ingestion is strong. The alignment with Blueprint 2 is clear. Early movers will reap the greatest rewards and position themselves at the forefront of this generational market modernisation initiative.
