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Until recently, Lloyd’s of London was still processing claims the way it had for 320 years—on paper, paper, and more paper

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Richard Ward will never forget his first day as CEO of Lloyd’s of London, the to be venerated specialty insurance market that brings together underwriters and brokers to insure everything from investing. banks to the World Trade Center to the teeth used by actress America Ferrera in the TV appear Ugly Betty. After getting in the elevator, or lift, as the 51-year-old Brit calls it, a woman entered toting a rolling suitcase. "Have you had a nice trip?" he asked. "No," she replied. "This is a claims toothed."

The actual feeling underscored an issue Ward knew he would have to stand over against as CEO of Lloyd’s. The centuries-old organization had a great reputation and track registry towards insuring and paying out concerning more of the world’s most extraordinary risks. But its claims processing was subdue stuck, in a sense, in the 17th century. "I joined a Lloyd’s that had not really changed its working practices or business practices and responded to technology in the past 320 years," Ward says.

Processing claims was uniformly a mostly hands-on, shoe-leather procedure. A broker would walk into Lloyd’s underwriting range in London—more 5,000 people mode in and out of this swing every appointed time—and present documentation to common of Lloyd’s underwriters, also known as members. The underwriter would soon afterward make comments on the documents, give it back to the broker, and the broker would then physically take it to a loss adjuster and a barrister. "You had this paper toothed that continually moved around the marketplace," Ward says.

Because of the involved character of what Lloyd’s members insure, the documentation could be massive, made up of, for example, years of maintenance and engineering reports on a multimillion dollar oil rig. Its claims procedures produced so much paper that to the lifetime when newly, Lloyd’s was transporting about four tons of bills of exchange every day from London to Kent, more 50 miles away, to be stored store in its back-office processing center.

Ward knew an efficient agent electronic claims-processing course, which he began implementing in early 2007, was long overdue. But getting members to change their long-entrenched ways wasn’t going to be facile. The theory worked well—it just didn’t process claims viewed like quickly as it might have. Many members, Ward recalls, didn’t "want to change their very traditional business practices."

To get started, Ward sought out those members who were displeased with the status quo. Together they worked out a system that would allow the electronic processing of claims that were held in a central repository. There lawyers, loss adjusters, and even claimants could check on the documentation and the claims. The group set stretch targets for getting the new rule adopted: By the extremity of 2007 they hoped Lloyd’s would be processing 90% of its claims electronically.

By getting internal movers and shakers on board early, Ward was able to get about 30% of claims processed electronically through early 2007. After that, though, the adoption rate stalled. "We started to plateau," Ward says. "That’s not unusual in a vary program." So he switched gears, developing a "naming and praising" exercise in which he made a list of the top 10 performers in terms of using the new system. It worked: The set time he released the first list, he got about 45 complaints from people who weren’t onward it. "The numbers improved 15% literally overnight," Ward recalls. "It had quite a dramatic impact."

In addition to carrots, Ward used sticks, too. Those who were slow to use the high-tech system were asked to put at interest more capital to cover their underwriting risks. He describes this punitive lever by characteristic politesse: "If you don’t process claims electronically," he remembers powerful members, "I’m afraid we’re going to ask you to keep more metropolis in the market because of your own inefficiencies."

Finally, he launched a communication campaign that had him visiting the CEOs of all the member companies. He knew that becoming as to one’s person involved and explaining the benefits to hesitant member-company leaders would help him meet his goals. They had to know it would "give alms to them in their business…rather than be a threat to them," Ward says. "It required a lot of legwork on my part. It required a chance of speeches, a lot of high-profile visits."

By the end of last year, Ward’s efforts had indeed helped Lloyd’s meet its ambitious target. The consequence: Customer claim-processing time in some classes of business was reduced by more than half, meaning customers were getting their money 50% faster than they were under the traditional of the hand mode of operation. "Our affair is altogether around our promise to pay," Ward says.