TechTalk: Enhanced underwriting prompts ‘transformational stage’ for insurance

The London insurance market, first conceived at Lloyd’s Coffee House in the 17th century, has always relied on follow capacity as its unique selling point.

One lead underwriter would set the terms and conditions on a slip and others would add their name below, providing the capital needed to indemnify the risk from multiple carriers without time consuming duplication of effort.

This centuries old innovation germinated the seed of the London market, still seen as the premier institution for specialist, complex insurance around the globe.

But, today, the model is undergoing a profound digital transformation, with traditional manual follow and days spent sending emails or on the phones giving way to what is variably called algorithmic trading, smart follow and enhanced underwriting. 

In November 2024, the Lloyd’s Market Association (LMA) released a landmark report on this very subject. Entitled The Growth of Enhanced Underwriting in the Lloyd’s Market: The New Normal?, this research project surveyed and interviewed companies responsible for a full 77% of Lloyd’s GWP and revealed some telling conclusions on the direction of the market. 

At that time, the LMA said this digitally enabled enhanced underwriting represented $5bn of market premium – equivalent to 7% of Lloyd’s 2023 GWP – with 100% of surveyed respondents expecting significant growth over the next five to 10 years. 

And, since 2024, the evidence of this growth has come thick and fast.

To cite just a few examples, Miller launched a new property smart follow facility in June 2024, algorithmic digital follow underwriter Ki welcomed QBE as a capacity partner in early 2025 and McGill and Partners expanded its Auton auto-follow facility capacity to 25% in November 2025, before then signing a major partnership deal with AIG in March earlier this month.

Digital transformation

The digitalisation of the London market has been a controversial topic for years. Lloyd’s only this month announced that it was officially abandoning the Blueprint Two market modernisation project, begun in 2020, owing to repeated delays.

But while market-wide, top down digitalisation is a gargantuan task for an institution the size of Lloyd’s, piecemeal updating of practices motivated by efficiency and profit is much more achieveable. 

The growth in enhanced underwriting over recent years has been fundamentally underpinned by a marked increase in the technological capabilities and capacities of market participants motivated exactly by these factors. 

Helen Rios, underwriting director at Ki Insurance and active underwriter for Syndicate 1618, explained: ”The London market has historically lagged on automation because of the complexity of risks. 

“However, recent technological advances have enabled much more complex automated decision making, making digital underwriting feasible at scale. Automation removes these scale constraints, building large diversified portfolios efficiently.

”This challenges the traditional underwriting model and makes it more attractive to carriers that perhaps previously overlooked follow capacity.” 

A large part of this technological development comes from advances in data processing, including leaps forward in the ingestion of complex information that can then be used to craft tailored underwriting criteria. 

The LMA’s report from 2024 said as much, noting that specialty lines carriers were “increasingly investing in tools and data to support underwriting decisions”, much like UK personal lines insurers did in the 2010s. 

Tessa Wardle, director of portfolio solutions at QBE, noted: ”We’re not writing risk by risk, we’re setting parameters and delegating authority to a coverholder, which could be a broker, an MGA or another insurer to underwrite on our behalf. 

“That’s always about having good data and the ability to ingest it, properly examine it and then set those parameters based on our appetite – obviously, at this scale, technology really helps with that.” 

Uneven adoption

As with the majority of technology trends, the pace of adoption has not been uniform across the insurance market for carriers and brokers. 

McGill and Partners, however, is a broker that has made it a priority to leverage this growing method of trading. Its Auton facility, launched in December 2024, was the first fully digital auto-follow broker facility in the Lloyd’s market and has been led by Beazley’s Smart Tracker Syndicate.

Mark Gregson, head of digital solutions at the firm, told Insurance Times: ”Most of the carriers are at different stages of their digital evolution and their advancements and investments in technology. Most actually can’t apply algorithmic underwriting at this stage.

”However, the London market and the insurance market as a whole is definitely in a transformational stage at the moment – there’s a real self-assessment from carriers going on around where they sit in the chain and how they approach their broker relationships.” 

The broker’s role in the enhanced underwriting chain effectively involves mapping a carrier’s appetite on to its portfolio of risks and then embedding those parameters to either submit risks or bind on their behalf.

This requires a high level of digital sophistication, however, and Gregson added that McGill’s digital partnerships can “look quite different depending on which carrier we plug into”. 

QBE, Wardle said, was a “first mover” in this space and is now reaping the benefits as a leader for portfolio solutions. However, she added that this form of insurance placement was beneficial for every company in the chain, as well as clients.

She explained: ”This is a more efficient placement mechanism for the broker and it reduces costs and make the insurance purchasing process more efficient for clients, so why would it not grow?” 

Gregson echoed this sentiment, adding: ”It’s very client centric from the perspective of certainty if a broker is focused on a lead and putting together the best insurance solution, but then, once they’ve established that there is, in effect automatic capacity there to support it. It’s advantageous for all parties to bring efficiency and speed of transaction into the process.” 

Horizon scanning

The London market is changing rapidly, with the rise of digitally enabled enhanced underwriting providing benefits to those that are prepared to reap the efficiency gains. 

But what could the market look like in the future? In 2023 approximately 7% of Lloyd’s GWP was traded in this manner and, while there has been no data collection on this point since then, recent market developments would suggest that this figure has grown and will continue to do so.

In 2025, Aegis London chief underwriting officer Matt Yeldham even suggested that up to 60% of Lloyd’s market placement could effectively be written on an automated follow basis. 

So where does this leave those firms that ignore these developments? 

Wardle said: ”There’s broadly alignment on making this work between both carriers and brokers because it’s a great client proposition and opportunity to reduce costs on the one hand – and they will lose out [on business] if they don’t.”

Gregson concurred, adding: ”I don’t see that the traditional methods of underwriting will cease to exist because of technological advances, but they may become less prominent, even if there will always be a place for it in London. 

“The biggest hurdle for the market to overcome is everyone trying to work to a different basis – the market will potentially start to separate and fragment into the most ambitious from a technology and digitalisation basis and those that are more focusd more on traditional methods.”