The Lloyd's Risk Blog » Market processes

2009: bumper year for Market modernisation

Carl Phillips — Tue, 22 Dec 2009 09:48:41 +0000

As we approach the end of 2009 it seems an ideal time to reflect on the year – and what a bumper year we as a market have had! It has certainly been challenging and one that has been packed full of major developments helping to modernise the market, so let me begin….

The Lloyd’s Exchange

We have delivered the Lloyd’s Exchange which is essentially a messaging hub - it supports the face to face process of doing business in the room with information and documents being exchanged electronically using ACORD standards.

By the end of the year we expect over 50 organisations to have connected and we are currently working with the LMA to promote the completion of endorsements via the Lloyd’s Exchange – this is primarily being driven by the market with significant involvement from Aon, Marsh and Willis in addition to Beazley, Brit and Catlin amongst others.

-What’s in store for 2010? Initially we are focusing on exchanging placement messages; however the Exchange has the potential to support the complete end to end business process electronically. As such, we will explore with the Market how other message types could benefit from being passed over the Exchange. The technology has been proven and now the emphasis is on helping the Market realise the benefits of exchanging information electronically.

Lloyd’s Information Project

Part of this project aims to offer choice in how information is provided to Lloyd’s and I’m pleased to say that we have successfully delivered a solution that will allow a pilot group of Managing Agents to report their Service Company business directly.

Work has also been carried out behind the scenes to ensure standardisation in the information that we store and use for tax and regulatory reporting purposes, to prevent, on an ongoing basis, any duplication or inconsistency in the data captured. This will also facilitate the reduction in the number of reports needing to be produced and in time, reduce the reporting burden.

The Future of Central Services
We are working with the market to define a future model for the provision of central services, which reduces risk & costs, or increases processing efficiencies. We have been working closely with the London Market Group (LMG) & a cross market group which is made up of Managing Agents, IUA companies, brokers, IUA, LMA & LIIBA. They have reviewed the proposed model and agreed the next steps, which are to conduct detailed design work to support the Future London Market Process Model which we will complete throughout 2010 through the Future Processes Steering Group.

ACORD Standards

The progress in the market uptake of ACORD standards in 2009 has been encouraging. One of the highlights is the agreement on implementing one version of the standard for placing (2009.1) for the first time without customisations to suit individual’s processing needs.

Development of e-Accounting is well underway too – with some brokers hoping to send premium information to the bureau using ACORD accounting messages early in 2010.

There is more to look forward to in 2010. One of the ECF2’s (Electronic Claims File) project’s remits is to agree how the ACORD claims standard is to be used for the advice and management of multi-party claims using ACORD messages. For placing, apart from meeting the 2009.1 implementation deadline in February, the New Year will also be kick-starting with applying the standard in the Endorsement Pilot (via the Lloyd’s Exchange). We really are moving to an electronic world and a more efficient market place – let’s keep up the momentum!

London Market Group (LMG) (formerly Market Reform Group)
The change of name and extension of remit for this group is truly significant; it is a reflection that the market has been reformed through the implementation of Contract Certainty, ECF, A&S and Electronic Policies and now it is about wider collaboration and continuously improving the market through modernisation. This will ensure that London remains at the forefront of the global insurance industry, enhancing the competitiveness of the London market.

So, to everyone out there in the London market please pause for a moment to reflect on these achievements – congratulations are truly deserved for the progress that we have made together – this really is a time to celebrate! Particular thanks to the 100 or so individuals from over 30 firms that have been instrumental in delivering these achievements.
This is my last blog of 2009 but I look forward to blogging again soon in 2010 – if you would like further information on any of these subjects or would like to suggest a future topic for me to blog about please do get in touch. In the mean time, may I take this opportunity to wish Season’s Greetings to you all.

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What’s the significance of a name?

Carl Phillips — Thu, 29 Oct 2009 09:48:25 +0000

It was recently announced that the London Market Group (LMG) has succeeded the Market Reform Group, is this just another renaming exercise or something more significant?

The change of name and extension of remit is truly significant; it is a reflection that the market has been reformed through the implementation of Contract Certainty, ECF, A&S and Electronic Policies and now it is about wider collaboration and continuously improving the market through modernisation.

As fundamental reform draws to a close and we move through to modernisation the LMG can address wider subjects that affect our market building the appropriate consensus around any issue that affects the competitiveness of our market. This will ensure that London remains at the forefront of the global insurance industry, enhancing the competitiveness of the London market. And maintaining London’s recently enhanced position in the global marketplace with the confidence to address future challenges as they arise.

Reducing the reporting burden

Carl Phillips — Fri, 29 May 2009 14:21:18 +0000

Many of you may have seen the announcement of the withdrawal of the Risk Registration scheme earlier this month.

The scheme began in 2001 and over the years the value of both the scheme and the data it captured has been diminishing.

So the time was right to make a call one way or another—re-energise or stop.

We decided to stop. And, as a result, we’ve removed some cost from our market by reducing the reporting burden.

The Risk Registration scheme is a perfect illustration of one of the problems of our market: we have several legacy processes that have morphed over the years to the point where the original intentions are lost.

Projects where success criteria and business value aren’t well defined up front, and aren’t tracked consistently after project launch, are especially vulnerable to this phenomenon.

When that happens we have to ask ourselves three basic questions: why are we doing this project? What is this product or process for? “What are the economic business benefits?”

That’s the kind of questioning culture we encourage in Market Operations.

Nowhere is that interrogation being applied more rigorously than in the Lloyd’s Information Requirements Project, where we are getting to grips with the data held within the central Lloyd’s systems.

We’ve examined numerous areas and identified reporting items to consolidate. By doing so we’ll eventually generate savings of around £200,000 a year.

We are now looking at the information held by each area and seeing how we can rationalise it and use it more efficiently—but only after we’ve asked ourselves about every report received and produced: why do we do this? What are the benefits?

Our aim is to reduce the reporting burden on managing agents as much as possible. But we also need to refine our data use so that it works harder for the market and costs less.

We have a way to go and we will keep you posted on progress. The demise of risk registration was a start.