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Market Reform Forum

Update on business reform

30 June 2005

Andy Brookes

LMP/Lloyd’s BPR

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Objective: up to speed in half an hour……

Contract Certainty LMP slips CC Implementations Evidence of cover Supporting projects, including Kinnect

Back office electronic infrastructure Accounting and Settlement Electronic Claims Files

What you should be doing Special topic: electronic placing - Ri3K

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Contract certainty: Market Game Plan

MRG endorsed the following, for implementation by end 2006:

Agree insuring clauses via a fully claused [1] slip or LMP policy (which also meets LMP Standards) before inception

Define process measurements and quality standards

Understand standards and apply them

Raise standard through independent QA

Play back errors and publish league tables

[1] typically by reference, rather than all wordings spelt out

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Contract certainty: the programme Key projects

Improve LMP slips CC score

- 95% June 2005; 99% March 2006

During bind: agree wordings; get checking done

- CCI process

- 30% of business end 2005; 85% end 2006

Evidence of cover – within 30 days Supporting projects

Policy checking by Xchanging Model wording

- MRG sponsoring project to improve CC

Legacy (not strictly CC, but close cousin) Kinnect/placement systems

- Consistent with all this, but reduce compliance cost

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Contract certainty: market progress MRG agreement on

- Terms and wordings have to be agreed before inception; [MRG considering the exact definition]

Measurement: “a good thing”, so expect more of it. Checks prior to inception for CC. [Are are XIS checks part of CC?]

Governance sorted

- CC Project Board in place

Reporting to FSA regularly

All firms have received CC briefing

Majority registered with LMP Office

- If not, FSA may be interested…..

More detailed planning with bigger firms

Training material in pipeline, with CII

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Contract certainty: each firm LMP slip score on contract certainty

- Will you hit 95% in June? And 99% in March ’06?

CCI process

- How will your firm achieve 30% of risks by end year?

– And 85% by end next year?

- Use CCI guidance material

- CCI means: sort out the contract, including wording, before you scratch

- Either full wording or references?

- All lines/cob or focussed?

- But quality matters, not just volume (hence checks)

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LMP Slips – wider and deeper CC score for open market: 93.5% May

- Up from 92% in March, 93% in April…..

- June target is 95%

CC score for binder LMP Slips: 95% April; the June target

- May out shortly; need to maintain performance

Continue to check 25% of Lloyd’s slips in 2005. IUA timetable set for companies; first slips received

LMP Slip 2005

- published in April

Extending to lineslips

- LMP standard for lineslips published in June

- 1 October mandate for Lloyd’s market

– Includes off-slips

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75%

80%

85%

90%

95%

100%

CC score[26 components]

Binders CC score[41 components]

Target

Contract Certainty [LMP Slip audit]

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Contract certainty: checking Policy checking Xchanging: Prudential Practice Requirements

Binders

- Two binder rejection reports for Q1 ‘05 issued to poorer performing firms (12 Lloyd’s; 12 brokers)

- QA tool re-issued in May

- XIS started checking to this list in June

- Resultant checking data likely in July

Open market – similar approach to binders

- Publishing open market checks Due now -end-June; likely to be next week

- Rejection report for Q2 2004- Q1 2005

- XIS start checking to this list in July

- Stats in August (narrative);

- Better stats in Q4 2005

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Legacy

MRG agreed cross-market priority rules

Rules available from the Programme Office

Investigating new Unsigned Policy List

- in accord with new rules

Recalculate stats; agree next steps (if any)

- Should there be market focussed effort in particular cob?

- Is it worth it? Is it doable?

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Kinnect Another customer announced in June

- Beaufort follows Chaucer, Cathedral, Limit/QBE in May Three brokers and seventeen carriers New release 1 June live as planned

- Enhanced placing functionality

- Slip creation by brokers in Kinnect for August inceptions

- One-way data flow initially but appetite for two-way Risk class expansion

- North American property Now

- Terrorism Live – August inceptions

- International property Q4. Further risk classes agreed for 2006

Data light template for any risk class in design Endorsements now in 2006, not Oct 2005, following ITT for future

supplier and review of platform development requirements

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Accounting & Settlement

Technical and data information: Phase 1, published in April

- Who is digesting it in your firm/supplier? Views please

- Phase 2 likely to be July (was May) – claims, ORI

MRG and Project Board addressing

- Content, sequence and dates for what next

- Key issue is risk appetite and management: dearer or slower?

- Don’t doubt commitment to progress

- Had planned to publish in Q1, will miss Q2

Measurement of process will be key feature

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Electronic Claims File XIS development work

Phase 1 - Operational in February Phase 2 - Now live Overall business process spec being signed-off later

than planned- Better end outcome for practitioners; but pressure on

timelines in Q1 ‘06 Phase 3 DRI design signed-off

- Wider functionality issues; LMA, LMBC and Claims Infrastructure Project Board managing

Implementation 6 partnerships operational in May Relatively low volumes – testing out electronic infrastructure 57 (and rising potential) partnerships identified

Live issues Cross market procedures and practices

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Market Reform Forum

Update on business reform

30 June 2005

Andy Brookes

LMP/Lloyd’s BPR