Smart follow for specialty insurance is just the start – smart trading is the direction of travel

Smart follow for specialty insurance is just the start – smart trading is the direction of travel

By Gilbert Harrap, CEO, Insurx

When Lloyd’s set out its new 2026–2030 strategy in April, it felt like a subtle but important shift in tone. The headlines, underwriting performance, efficiency, capital optimisation and culture were familiar enough. But the bigger change sits underneath that. This isn’t another attempt to transform the market through a single, central programme. It’s Lloyd’s stepping back a bit and focusing on enabling the market to evolve itself, ultimately with the aim of making it easier to enter, easier to operate, and less burdensome from a regulatory and capital perspective.

In practical terms, it should make Lloyd’s easier to enter and easier to operate in, particularly when it comes to deploying capital and navigating regulation. But strategies on paper don’t really change how business gets done day to day. That happens somewhere else, on the desk, in the placement, in the back-and-forth between broker and underwriter.

And that’s where the more interesting shift is happening, I would argue. Over the past couple of years, “smart follow” has started to prove a point. If you structure things properly, if follow capacity is aligned in advance and the data is there, you can take a big chunk of friction out of the placement process. Things move faster, with more precision and better trading margin for all involved. There’s less chasing, less rekeying, less uncertainty.

The direction of travel

Smart follow is only part of the story. Smart trading is the direction of travel – technology and strategies supporting not just how capacity follows, but how risks move through the market more generally for both lead and follow. How they’re structured, how decisions are made, and how much of the process actually needs to be a negotiation in the first place.

The timing isn’t accidental. The market is softening. Growth is harder to come by. Brokers are still out there trying to win new business, that hasn’t changed, but there’s more pressure on how well they execute as well. How quickly can they place? How seamlessly can business be renewed, and how can more business be retained at renewal? How much margin do they keep? How do they scale without just adding more people to manage the process?

On the underwriting side, it’s a similar tension. There’s capital to deploy, but no appetite to lose discipline in how it’s deployed. The old way of doing things, lots of emails, lots of manual touchpoints, lots of iterative negotiation, starts to creak a bit under that kind of pressure.

You can see where the market has started to respond. Smart Facilities are one of the most visible expressions of it. Gallagher’s Evolve, and what’s followed with Galaxy, are good examples of what happens when you rethink how follow capacity is accessed.

But it’s easy to focus too much on facilities themselves. The more meaningful shift is what sits behind them; moving away from negotiation as the default, at least where it isn’t actually adding value, and towards something more structured. Pre-agreed parameters. Clear rules around participation. Better data flowing through the process.

That doesn’t take judgement out of underwriting. It just stops wrapping that judgement in unnecessary friction. And once you start doing that, other things begin to change quite quickly.

From a broker’s perspective, yes, things get faster, but that’s almost the least interesting part. What really changes is how predictable the process becomes. You spend less time managing the mechanics of placement and more time on the parts that actually matter: shaping the risk, advising the client, deciding how you want to bring it to market.

Alignment over automation

It also helps with some long-standing issues. If you’re a network broker, it can reduce leakage. If you’re a wholesale broker – as is much of the specialty market – it can make it easier to access and match the right capacity. Either way, it’s about being able to operate at scale without everything becoming more fragile.

For underwriters, the change is quieter but just as significant. Instead of reacting to risks one by one, there’s the potential to engage with broker flow in a more structured way. You can define what you’re looking for, how you want to participate, and then scale that participation without losing control.

There’s a lot of talk about automation in all of this, but that’s not really the point. The more interesting idea is alignment. When both sides are working off the same structured view of risk, and there are clear rules around how capacity is deployed, the whole process starts to feel less like a loop of negotiation and more like an actual trading strategy.

You see it in the outcomes; more consistent portfolios, fewer missed lines, better balance between growth and discipline. And you can already see where it’s heading. Algorithmic capacity starting to sit alongside tracker and quota-share facilities. More dynamic ways of deploying capital. Live data being used to manage portfolios as they develop, rather than reviewing them after the fact.

Why now?

None of that happens in isolation. It fits quite neatly with where Lloyd’s is trying to get to: less prescription, more flexibility, and a market that can support different ways of doing things without forcing everyone into the same model.

For a long time, “modernisation” in the London Market has effectively meant standardisation; getting everyone to do the same thing, in the same way. But that is changing. The strategy is not about forcing convergence, but about creating the conditions for better choices: how brokers place, how underwriters participate, and how business flows through the market.

Smart follow is already demonstrating how parts of the process can be simplified. Smart trading is what happens when you apply that thinking more broadly.

And the reason it matters now is simple: the market conditions are forcing the issue. Growth is harder, margins are tighter, and neither brokers nor underwriters can afford the inefficiencies that have historically been absorbed. The market doesn’t just need to modernise—it needs to trade better.