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Update on Market Reform. Andy Brookes, Brian Austin Market Reform Forum 23 November 2006. Market Reform Update. Contract Certainty Back office electronic infrastructure Accounting and Settlement strategy work – today’s special topic Repository for claims and A&S - PowerPoint PPT Presentation
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Market ReformProgramme Office
Update on Market Reform
Andy Brookes, Brian Austin
Market Reform Forum
23 November 2006
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Market Reform Update
• Contract Certainty
• Back office electronic infrastructure
– Accounting and Settlement strategy work – today’s special topic
– Repository for claims and A&S
– Measurement and tools to aid A&S performance (“Stage 1”)
• Forward agenda for reform – 2007+
•Headlines:
– Repository rules sorted. Have you signed them?
– Publications: Little new this month.…CC reverse flow business
– ….but last month: CC FAQs; BA and lineslip guidance; A&S strategy
www.marketreform.co.uk
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Contract Certainty
• Market still on target to achieve 2006 milestones
• FSA Liaison:
– They remain satisfied with progress to date, subject to:– Quality & robustness of data– Reduction in exceptions, including measure of value– Legacy reduction
– Timetable for future activity– John Tiner speech Nothing released 14 November– “Industry assessment of success” 8 January– CEO meeting and FSA response 25 January– But remember: ‘December’ means late Feb/March for data
– FSA looking for clear plans for 2007+….
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• Brokers’ score for open market 84%, from 86% in July.• Brokers’ score for certificates of insurance 92% certain, 93% in July.• Overall, 88% in August
Broker Contract Certainty Report for August 2006 (reported in Oct 2006)
Broker Contract Certainty ReturnsBy inception to Mar-06, therefore inc late placements and late orders
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06
Open Market Contracts Certif icates of Insurance Overall Average
Target
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• Evidence of cover within 30 days score 83%, up 2% on July
Broker Contract Certainty Report for August 2006 (reported in Oct 2006)
Evidenced to Client in 30 days
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06
Open Market Contracts Certificates of Insurance Overall Average
Target
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Broker Contract Certainty Returns for August 2006 – breakdown for incomplete and late placements
• Contract certainty 88% in August for open contracts and certificates• Order completed by inception 72%• Order completed after inception at 5%• Firm order post inception at 10%
Broker Contract Certainty - Open Market Contracts and Certificates
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06
Order Completed by Inception Order Completed after Inception Firm Order post Inception
Target
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Measurement FAQs
• What is the issue?
– It has become clear that organisations are interpreting the CoP & Checklist in different ways
– This results in inconsistency of measurement
• What are we doing?
– Clarifying the recommended approach wherever possible (via FAQs). Publication imminent
– Reviewing the Code of Practice/Checklist for consistency for end 2006
• Examples
– Using own checklist: audit trail
– Late placements: a fail? Up to you
– Service of suit: not required for CC pass, but do it anyway
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Lloyd’s Legacy Policy Analysis Q3 2006
PriorityPercentage change
April-July 2006Percentage change July-September 2006
Priority 1 12.81% 5.37%Priority 2 0.56% -2.61%Priority 3 0.33% -1.04%
Total 3.23% 0.20%
0
20,000
40,000
60,000
80,000
100,000
120,000
April 2006 July 2006 September 2006
Priority 1
Priority 2
Priority 3
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Contract Certainty
• Other CC related activity:
– MR Slip adoption
– Binding Authority Slip Guidelines
– Lineslip Slip Guidelines
– Representing orders on slips – “order hereon”
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Contract documentation pilot: Objectives
“To improve efficiency and client service”
Richard Ward, May 2006
Slip checking prior
to signing
The slip as final contractual
document
Published set of checks
MAs empowered to perform checks
Addendum to MR slip
This will be achieved through..
Action needed to achieve these outcomes..
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Outcomes for Contract Documentation
For Carriers:
• Minimal error rates resulting in processing cost reduction
• Protection of licences
• Improved operational efficiency
For Brokers:
• More efficient marketplace to bring business
• Reduced cost due to reduced/eliminated need for stage 2 checking
• Better client service
• Contract document produced within 30 days, therefore no need for a cover note
For Capital Providers:
• Reduced operational risk
• Improved customer proposition
• Improved operational efficiency
For the Insured:
• Lessens uncertainty in case of early claims arising
• Contract received within 30 days of inception
• Clarity of contractual terms which also results in faster payment of claims
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Pilot Participants (as at 22/11)
Brokers
Aon
Benfield
Glencairn
Guest-Krieger
Guy Carpenter
JLT
Marsh
Miller
Willis
Hayward Aviation
Managing Agents
Ace
Advent
Amlin
Brit
Beazley
Catlin
Chaucer
Canopius
Hiscox
SA Meacock
Talbot
Kiln
Limit
Wellington
Novae
St Paul Travelers
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Pilot Latest
• Low volumes, but starting to pick up
– More Brokers/MAs are participating
• Awareness raising activity being planned for early December
– Improved reference material on website
– Promotional material
• MR Slip Addendum – under discussion
– Minor variant of the Market Reform Slip required
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Pilot Latest - QA Tool
• All Classes of Business live from end October
• Mapping to Lloyd’s Risk Codes – spreadsheet now available online
• Functional change under development for delivery mid-December:
– Reclassify checks as Contract Certainty, Regulatory and Taxation or Risk Management
– Filtering to match the above
– Exporting in a user-friendly format
– Selecting Reinsurance type separately to Class of Business
– Addition of guidance on how to carry out each check
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Need more information on the pilot?
Or visit http://www.lloyds.com/Lloyds_Market/Tools_and_reference/Quality_assurance_tool/QA_Tool_pilot.htm
Suite LG1LUC3 Minster CourtLondonEC3R 7DD
John Hobbs – IUATel: 020 7617 4440Fax: 020 7617 4440Email: [email protected]
IUA Insurers
Suite 1085Lloyd’s1 Lime StreetLondonEC3M 7HA
Martin Roberts – LMATel. 020 7327 8370Fax: 020 7327 4443Email: [email protected]
Lloyd’s Insurers
BIBA house14 Bevis MarksLondonEC3A 7NT
Matthew Bateson – LMBCTel: 020 7397 0212Fax: 020 7626 0564Email: [email protected]
Brokers
Gallery 6Lloyd’s1 Lime StreetLondonEC3M 7HA
Richard Palethorpe – Business Process and Change ManagementTel: 020 7327 6491Fax: 020 7327 5887Email: [email protected]
General Queries
AddressContactType of Query
Suite LG1LUC3 Minster CourtLondonEC3R 7DD
John Hobbs – IUATel: 020 7617 4440Fax: 020 7617 4440Email: [email protected]
IUA Insurers
Suite 1085Lloyd’s1 Lime StreetLondonEC3M 7HA
Martin Roberts – LMATel. 020 7327 8370Fax: 020 7327 4443Email: [email protected]
Lloyd’s Insurers
BIBA house14 Bevis MarksLondonEC3A 7NT
Matthew Bateson – LMBCTel: 020 7397 0212Fax: 020 7626 0564Email: [email protected]
Brokers
Gallery 6Lloyd’s1 Lime StreetLondonEC3M 7HA
Richard Palethorpe – Business Process and Change ManagementTel: 020 7327 6491Fax: 020 7327 5887Email: [email protected]
General Queries
AddressContactType of Query
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ECF
Now Live and ‘Ramp Up’ underway
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Repository Rules Signatories (as at 22/11)
Brokers Managing Agents
Aon
ARB Int’l
Benfield
Cooper Gay
Corrie Bauckham Batts
Corrie & Ptrs
Guy Carp
Harman Kemp North America
Marsh
Miller
NMB
SBJ
Stow and Croton Ltd
Amlin
Argenta
Atrium
Beazley
Brit Insurance
Catlin
Chaucer
CMGL
Faraday
Hiscox
Illium
Kiln
Liberty
Marketform
Mitsui
St Paul Travelers
Wellington
(and XCS as Service Provider)
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ECF Processes & Procedures on line
• Reformatting of the SP&P doc to make it more easily accessible
• MooD is a business process modelling tool used to support this work
• Allows process maps to be published (& navigated) on the web and:
– Replace texts with diagrams (processes) where possible
– Allow users to ‘drill down’ from high level info to more detail
– Place information in context
– Display information by role e.g. applicable to Broker only
• Once ready the ECF Processes & Procedures Guide will be published to the Market Reform website (access is free)
• Should be up early December
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Useful Links
General FAQs
Broker Views
Broker using ECF via own systems
Underwriter Views
Leader using ECF
Follower using ECF
ECF Processes and Procedures GuideWelcome to your guide to the Electronic Claims File. This provides a structured walkthrough of the Claims process, with more detailed levels of information where the new system is used.
End to End - Lloyd's Market Electronic Claims Negotiation
Getting StartedRemember to add this page to your favourites
Providing Feedback
Follower raises concerns with XCS
Broker using ECF interactively
Lloyd's Claims StrategySystems Processes and Procedures v1.1 (Web)
About this Guide
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Leader using ECF
Consider claim
Retrieve claim information
Login to market repositoryLogin to the market repository
Before
Leader end to end claims negotiation view
Search for a claim transaction or view a document
After
Assess the loss advice, consult with other parties, and consult with additonal agreement parties
Create or update claim file
Broker
Leader using ECF
Post response processingThe system performs some processing after a response is added
An electronic claim file is created or updated
Record response instructions & comments
Lodge documents
Add a response to the claim transaction and record comments
Would you like to see an end to end view of Claims Negotiation Process from the Leader's perspective?
Add a document to the electronic claim file
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Need more information on ECF?
Email: [email protected]
Or Speak to Adam Stafford at the end of the session.
Or Visit www.marketreform.co.uk
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MRG forward looking agenda
• 2007 laminate
• Keep doing the “blindingly obvious”
– FSA will not go away on CC and legacy
– New infrastructure: ramp-up use; oversee changes
• Vision and road map
• What else?
– Talk to your Association and MRPO