Blueprint Two Foundational Playbook for Managing Agents: The Oxbow Partners View

August 19, 2022

Earlier this month, the LMA in partnership with NTT Data released the Foundational Playbook for Managing Agents, a helpful guide to support implementation for the Blueprint Two changes.

We have published a summary of the 92-slide guide and self-assessment tool, here. In this article we share five observations on the Foundational Playbook, and our thoughts on what Managing Agents need to do next.

5 observations on the Foundational Playbook

Overall, we believe the LMA publication provides a good balance of depth and comprehensive analysis. However, it is worth noting the publication is purposefully agnostic to the nuances of individual managing agents (i.e. size, operating model, vendor partners etc.). Therefore, it does not go into the specifics of how solutions should be implemented or provide estimates on the potential delivery timelines and costs – this is for the managing agents to develop. We have listed our five main observations below:

1. A supportive call to action

It is widely acknowledged that it has taken too long to get to this point, with many false dawns along the way. However, the Blueprint Two updates this year (January and more recently June), and now this publication reaffirms that change is around the corner (and 2024 is not far away).

The Foundational Playbook and self-assessment tool will likely provide a wakeup call to many, and the release is timely as managing agents are currently commencing planning for next year. The guide can support market participants supplement their existing plans or start to develop their Blueprint Two plan and shape their investment and resource requirements for 2023.

2. Comprehensive and clear, with everything in one place

The Foundational Playbook can be read as a stand-alone report, providing a one stop shop for a range of audiences (from C-suite, down to the functional heads and change teams that will be at the implementation coalface). The report has taken the onerous legwork (which cannot be underestimated) away from the Managing Agents and consolidated the information currently available regarding all Blueprint Two changes and timelines.

The summary provided in Section 1 is a useful resource for COOs and execs, while in Section 3 we like the depth and detail provided for each of the individual Blueprint Two components (e.g. CDR, iMRC, Digital Gateway).

3. Individual Blueprint Two components assessed by business impact, level of dependencies and overall status (readiness)

A lot of the value in this report comes from the assessments of the individual Blueprint Two components, providing the reader with an understanding of the relative business impact (across people, process and technology), dependencies (on third parties outside the managing agent, e.g. brokers) and status (i.e. readiness, based on currently available information to develop detailed plans).

For example, the DA claims tracker (which is currently live), has relatively low business impact and no dependencies for managing agents – good news for implementation planning. In comparison, the Prop Treaty component has the highest business impact, a high dependency on third parties, and is not yet fully defined which will make implementation planning more challenging. This information is nicely summarised across slides 16 to 18 of the guide.

4. Practical recommendations, whilst recognising uncertainty

For each of the Blueprint Two components, the report outlines the proposed go live date and the changes that are required (including alternative transition options). From this, the guide provides managing agents with guidance in terms of what can be done now (ranging from high level planning to full adoption of the service) and with who/whom (i.e. internal teams, Lloyd’s, brokers). Whilst the recommended actions are high level (in part due to keeping guidance generic), they are a robust starting point for change teams to start thinking through the required steps.

Perhaps more helpful is how the report supports Managing Agents to plan around the uncertainty. For each component, the report identifies any dependencies and information gaps, when this information is expected to be available, and outlines the corresponding actions once the information is released. Where the resolution of dependencies is currently unknown, the report acknowledges these in a glossary of ‘known unknowns’, (e.g. the iMRC scope and structure).

In the announcement, the LMA recognised the report will need to become a ‘live’ document to effectively remain up to date with the changing status of the unknowns and will be considering options to support this.

5. Mindful of future benefits

Finally, whilst these changes are all mandatory, executive teams will want to understand the potential benefits. The guide provides a framework for managing agents to quantify the hard and soft benefits as part of their planning approach.

Additionally, whilst not in the report itself, the LMA are working closely with Xchanging to provide an updated view of the estimated savings delivered by the future market changes. Whilst the fine detail will not be available until 2023, they are hopeful of providing further information in the next 2-3 months.

What next? How Managing Agents should respond?

As outlined above, the Foundational Playbook provides a significant helping hand to managing agents by consolidating the information required to supplement or develop an implementation plan. The challenge for many will be translating these resources into their own plans, whilst balancing a backdrop of an already stacked change portfolio and resource pool. We see three main steps for managing agents to take the Foundational Playbook to implementation:

1. Personalise and prioritise

Managing agent’s receiving the Foundational Playbook are already on an implementation journey towards the 2024 go live date. However, we anticipate that the majority will be in the early stages given the lack of firm milestones and requirements until recently.

Therefore, taking the information available in the Foundational Playbook and personalising it to a managing agents’ own situation is the first logical step. This will involve selecting a transformation path (transition services vs full digital adoption) and identifying which Blueprint Two components are in scope for their business. Based on these decisions, and the depth of information available relative to the potential business impacts, the managing agent will need to prioritise which areas to tackle first.

We believe prioritisation at this early stage is essential for managing what will likely be a limited delivery capacity for the majority of managing agents.

2. Assess the wider strategic impact

It is important managing agents consider the wider strategic impact of their choices in step 1. The upcoming market changes should be considered in two respects:

1. Existing strategy: based on the market changes, how do managing agents need to adapt or refine existing transformation strategies and roadmaps, including a realignment of resources and priorities?
2. New opportunities: secondly, how do managing agents ensure maximum value is achieved new opportunities presented by the changes – especially regarding enhanced data capture, process efficiency and potential organisational changes

By building the Blueprint Two changes into the go-forward strategy, managing agents will ensure senior stakeholder buy-in and minimise potential resource and funding bottlenecks.

3. Develop implementation approach and resource requirements

Finally, based on step 1 and 2, managing agents must develop an implementation roadmap including resourcing considerations (i.e. change, technology, business stakeholders and third parties) to quantify the scale of the investment and timelines to deliver.

Given the uncertainty, managing agents must be willing to accept a degree of flexibility in their planning and change budget. We recommend regular stage gates to review internal progress against external market developments and re-evaluating (within reason) the implementation plan. Engagement and alignment with the market support groups and forums will be essential.

Implementing these changes is not straightforward, especially given the path to go-live is not fully defined. However, early planning and action will avoid unnecessary pressure as the 2024 go live date approaches. Oxbow Partners has helped many clients in the London Market set out their strategy for transformation and digital adoption with respect to Blueprint Two.

Please contact us to discuss how we can support your Blueprint Two planning and implementation.