Back in 2107, Lloyd’s banned alcohol between 9:00 and 5:00. But the gnomes of Lime Street were only following a precedent set by the Formula 1’s governing body, the Fédération Internationale de l’Automobile, in 1958. That’s when alcohol-based racing fuels were banned on the F1 circuit. It was petrol only from then on in.

Since then, the F1’s salvo of annual rule-changes has been anticipated and prognosticated-upon with as much chutzpa as the next Marks & Spencer Christmas advert. Part of the interest lies in the seemingly backwards nature of each year’s regulatory amendments. For a sport built on speed, it seems perverse to outsiders that each year F1 teams must implement new rules intended to slow them down.

It’s like doping all the horses to stop any from falling. The laws of F1 are changed annually to keep it safer than technology permits.

Unlike the 22-MPH-maximum go-karts at the local circuit so beloved by my sons, however, the evolution of F1 machines hasn’t been stifled. Even though every speed-enhancing innovation is strangled at birth, the automotive geeks comprising the sport’s engineering teams continue to find new ways to make cars faster, even whilst complying with recent regs intended to slam on the anchors.

Believe it or not, insurance has less regular, less radical regulation changes than motor racing. Yet ours seem to stifle innovation. At the very least, they serve as an excuse to retain the inadequate status quo. In one case, the COO of a relatively new insurance company told me they had selected a policy administration system that they knew isn’t fit for purpose. But it’s used by a good chunk of the market, he explained, so they knew it would tick one of the regulator’s infernal boxes.

Perversely, the use of outdated policy admin systems actually makes complying with regulations harder. Note the £9,695,000 levied against MS Amlin in 2022 by the Prudential Regulation Authority. The penalty was for “failing to comply with its regulatory obligations relating to governance and oversight of underwriting, underwriting controls, management information, data quality, and risk management strategies and systems.”

The PRA declared that the Lloyd’s managing agency, one of the largest in the market, had failed to “ensure management information was adequate, consistently available and appropriate so as to inform the MSAUL Board’s discussions and form a reliable basis for decisions; operate an adequate data repository system and consistent data quality controls; and embed sufficiently effective controls over underwriting.” A state-of-the-art platform would do all of those things.

We can learn from F1. There, engineers, drivers, pit crew – everyone – seeks to go as fast as possible within the rules. Our goal should be to write more in premium than we pay in claims, also whilst staying within the boundaries set by our governors. F1 people do it by tweaking the technology. We do it by making better underwriting decisions, which we can achieve in part by improving the technology that supports the brain work.

Even when the regulators make decisions which seem to slow us down, we must innovate relentlessly to ensure the tools we use allow us to maximise profitability whilst we stay in our lanes.