Online on Lime Street.

With old-fashioned shoe leather and newfangled technology, Lloyd's builds a Web portal into its unique world. When the dot-corn world infiltrates a 300-year-old English institution, the chemistry can be interesting. The team that helped create the lloyds.com Web site learned a lesson when its corner of Lloyd's was "visited by the fashion police" and advised to bring its dress code up to the standards observed elsewhere in the insurance market's London headquarters. Dark suits promptly appeared.

That's a small example of the cultural adjustments that have been going on as Lloyd's tries to wrap its traditions around an emerging business model that is centuries removed from the market's origins. The Web team may have conceded the wardrobe skirmish, but tradition appears to be giving far more ground elsewhere. For virtually all of its history, personal relationships have been at the heart of Lloyd's business--brokers and underwriters working one on one to create coverage for risks that no ordinary insurer would touch. Now Lloyd's participants are facing the opportunity--if they embrace it--to feed risks into the market electronically from around the world. While no one expects Lloyd's face-to-face culture to vanish, the Web-based dealing now filtering into the market is "antithesis to that culture;" said Mike Mathias, director of the U.K. financial services practice at Sapient Corp., which won the contract to help Lloyd's develop its new Web portal.

Jarring as the change may be, Lloyd's has wasted no time in pursuing it. Mathias, who related the tale of the dress code, admitted to being surprised at the market's decisiveness, even though the pace has slowed a bit after the April launch of lloyds.com. The new portal to the world of Lloyd's took over the domain previously used by the market's less flashy corporate site--which was shifted to a more cumbersome address at www.lloyclsoflondon.com.

Opening a Window

Work began on lloyds.com long before the technological end of the project was even put out to bid. As early as February 2000, Lloyd's officials were looking at their existing site with an eye to what parts of it attracted the most interest. They discovered that its directories, which helped visitors to locate underwriting syndicates and brokers in the market, got the most use, said Caroline Wagstaff, head of marketing and communications at Lloyd's. Plans for the new lloyds.com began to move along the lines of using the Web's ability to sort and personalize data for users. In the process, the market hoped to open a new window on "the best-known, least-understood brand in insurance, "Wagstaff said.

In September, the Lloyd's Market Board approved funding for the project, which will have run up a tab of about [pound]5 million (about $7.1 million) by the end of 2001. Last October, 14 bidders were invited to compete for the contract to build the site. By November, Sapient began work on the portal, which Lloyd's had promised would go live in April 2001. Working with an existing team within Lloyd's that had been on the job for months already, Sapient had five months to put together a complex platform that would have an extensive database behind it and room to add even greater capabilities.

"We knew at the very beginning that what was being asked of everyone was pretty demanding," Mathias said. "We knew it was going to be a tough five months." Sapient usually follows a four-step process of defining the work, building the concept, doing a detailed design and implementing the site. With lloyds.com, we did have to adapt the process quite dramatically," Mathias said. Steps that were usually done sequentially were done on a parallel basis instead, and, in the end, the project came in on time and on budget, he said.

A key ingredient of the portal was transparency--making the bewildering and intimidating world of Lloyd's intelligible and accessible to potential customers who otherwise would have no idea where to begin looking. But there remained the challenge of collecting information from a plethora of autonomous operators in the market and putting it into a standardized format, organized so that visitors to the site could find what they needed quickly and easily

Going Door to Door

From January to March of this year, Lloyd's officials, including Wagstaff, expended "a huge amount of shoe leather" in traversing the market, making presentations to the managing agencies and brokers that ultimately would supply the content that would be the meat of lloyds.com. The proposition was made more appealing in part through "entirely devolved content management"--which means that each company that puts its information on the site can manage that content to its own liking.

"We had to do a lot of selling to them initially," said Ashok Gupta, chief executive officer of lloyds.com, which was established as a separate subsidiary of the corporation of Lloyd's But once the selling took place, the site's creators were in the "luxurious" position of having the site's sponsors and customers be one and the same, he said.

The market was "fantastically cooperative" in getting the site up and running, and at launch virtually every managing agency had at least some content posted on the site, Wagstaff said. About 70 to 80 products are added each week, she said, noting that maintenance of the site is a monumental and never-ending task--like painting the Golden Gate Bridge."

Within six weeks of going live, lloyds.com had its first success stories, including a $5 million piece of business that the underwriter wouldn't have gotten otherwise, and another underwriter/broker partnership that is growing out of a virtual introduction at the site, Gupta said.

Yellow Pages

What's available now is regarded as "Version 1" of the portal, and its services will remain free to external users seeking information. Managing agents and brokers that post information on the site were promised a six-month free trial but eventually will be charged for the service, said Wagstaff, who compared it to paying for a listing in the yellow pages.

The main active areas of the site are the market intelligence section, with articles, reference links, country briefings and other information, and the market finder, the site's matchmaking service that lets registered users find which participants in the market offer the products and services they need. By filling out a form that defines the type of risk and details such as geographical location, the user receives a set of matches, and the site then manages the first online contact between the two parties through a secure facility. From there, they decide how to carry out any transactions. The process rewards underwriters for providing detailed information to the site, as it increases their chances of coming up as a match when a potential customer uses the market finder.

For all the labor that has gone into building lloyds.com, the site remains a work in progress. Having created a new way for outsiders to view the labyrinth of Lloyd's, the portal's managers are still fine-tuning "what's the best way to use the shop window," or "which products to put in the window," Gupta said.

That is done through give-and-take with underwriters and brokers, aimed at determining what works best and implementing it--which Gupta described as a repeated exercise. "Once we've gone around that loop about three times," a much clearer picture will emerge, he said.

One way of fine-tuning the site is simply to look at which products generate the most inquiries and to add more products in those areas, Wagstaff said.

Doing Business Online

The next logical step might appear to be moving the portal from a kind of road map and introduction service to a truly transactional site. But, Gupta said, "It's got to be driven by what works for our customers, and our customers' customers.

"We do believe there's tremendous potential to improve the whole process of conducting insurance," Gupta said, "if you can marry liquidity with an improved way of conducting business." Liquidity in this case simply means a sufficient volume of serious buyers and sellers coming to the site, he said.

If lloyds.com develops a transactional component, it will have to be in lines of business that are suited for an online model, and such a capability for the site on a collective basis is "a pretty long way down the list," Wagstaff said. She suggested that more commodified types of business would be the best fit. Developing such a system would be fraught with problems, she said, in part because "different underwriters ask different questions" in assessing a risk. But none of this stops individual players from using lloyds.com to lead customers into their own online trading systems, Wagstaff said.

Developing online customers involves changing behavior, which can be a three- to five-year process, Gupta cautioned. "You have to have a deep understanding of a) customers' needs and b) how you produce something that people actually want to buy," he said.

Version 2.0

Mathias said that Lloyd's is now engaged in a strategic review to determine what Version 2 of the site should include. That could be determined as early as September, he said.

"We're keeping the pressure up to move fast," Wagstaff said. The goal is to put a proposal before the Market Board and the market's ruling council in the early fall, she said. While lloyds.com owes its very existence to the Lloyd's market, Wagstaff said the online venture is trying to keep an arm's-length distance from some aspects of Lloyd's, such as its admittedly "Byzantine" customs and procedures. The aim is to "try to keep our little e-commerce baby away from them," she said.

Gupta suggested that the Internet is leaving behind an age of innocence, when small-time entrepreneurs were seen as able to build instant empires from a garage. The future, he said, belongs to "serious organizations" with real staying power.

Lloyd's is one such organization, Gupta said, entering the fray with a "superb" brand--"it's difficult to think of a brand that has better presence. "As a market rather than a company, Lloyd's also has a neutrality that positions it well to create an online marketplace, he noted. Finally, it has expertise that is a magnet for customers, Gupta said. The site had 1,300 registered users by late June, more than half of them retail brokers, and it was averaging 2,000 visits a day. The feedback, Gupta said, has been "incredibly encouraging."

Lloyd's has the advantage of being almost uniquely global in scope, Gupta said, and taking advantage of those global skills could be a key to developing a better online market. It also has the advantage of being built from the collective input of a group of stakeholders who also stand to be customers, he said.

"Once you've done that, you do have a set of customers who are willing to buy"-the ultimate prize in e-commerce, Gupta said. "The world is littered with dead dot-coms with wonderful models that nobody was willing to buy."