By Ryan Hewlett, Aidan Gregory

March 25 - (The Insurer) - Lloyd’s has said the phase one cutover of its Blueprint Two digitalisation programme will now not take place during 2025, marking the latest delay to exiting CEO John Neal’s long-anticipated modernisation agenda.

The news was confirmed in a circular sent to senior market figures on Tuesday. Lloyd’s did not provide a new cutover deadline or any indication as to when completion may take place.

Phase one, the digital solutions element of the Blueprint Two roadmap, is focused on moving the market to a single digital platform and implementing processing services for open market and delegated authority business.

Lloyd’s said the move had been driven by continued delays to testing. It added that the Corporation’s “current focus” is on internal testing using Velonetic (the joint venture between Lloyd’s, DXC Technology and the International Underwriting Association), Lloyd’s and selected vendors.

“Although we're making good progress with completing build, the new sequential testing approach, combined with the estimated time it will take to get through all aspects of testing, will result in cutover not taking place during 2025,” said the letter, signed by Velonetic CEO Bob James, COO Callum Gibson and Lloyd’s transformation director Matt Unsworth.

In addition, Lloyd’s disclosed in the circular that an “enhanced external testing strategy, approach and timelines” will be delivered to stakeholders at the next market event on April 28.

As part of this estimated timeline, it is anticipated that the early adopter group, known as vanguard nine, will commence testing from May 2025. The wider vanguard testing will begin in October 2025.

The current iteration of the testing plan is for customer coordinated testing, managed by LIMOSS, to start no earlier than Q4 2025. Lloyd’s has previously elected against any large technology migration during November and December due to preparations for the 1.1 renewals, while January is also challenging because finance teams are busy preparing annual results.

“Our expectation is that this updated testing approach will support a simpler, more efficient market testing approach for all customers, allowing defects to be found earlier in the testing lifecycle and the ability to do more end-to-end testing,” it said.

As previously reported, the cutover will happen all at once in a “big bang” style launch. Once completed, phase one will have delivered the central processing and technology foundation for the market to leverage their own digitisation strategies.

Sheila Cameron, CEO of the Lloyd's Market Association, welcomed the “transparency and clarity” provided by today’s announcement from Velonetic and Lloyd’s. She added that the LMA has long advocated for a “milestone-based approach” to delivery of the Blueprint Two programme.

“The milestones outlined in this communication are sensible and will help mitigate programme risk overall, whilst also enabling firms to meet their operational resilience requirements for an incredibly complex programme,” said Cameron.

In an emailed statement, James said Velonetic and Lloyd’s have a responsibility to only cutover to the new platform when it has been tested in “a robust and fulsome manner”.

“To do that we are working on a testing strategy that is sequential in nature – systems testing, followed by testing within Velonetic, and then vendor, and ultimately customer testing – and we will only move to the next phase once the current phase has successfully completed. This allows for cleaner code to be tested in the next phase and more end-to-end testing to be done.

“This sequential method of testing allows us to build one phase onto the other but lengthens the testing timeline.”

The latest delay will add to ongoing uncertainty around the likely end date for completion of the modernisation initiative.

Lloyd’s confirmed in June last year that the Blueprint Two phase one cutover had been delayed to an unspecified date in 2025. This followed The Insurer’s earlier reporting that Lloyd’s would be forced to delay completion of the first phase from the promised July 1, 2024 go-live date until at least October 2024.