Update on Market Reform Andy Brookes, Brian Austin Market Reform Forum 23 November 2006.

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

Update on Market Reform Andy Brookes, Brian Austin Market Reform Forum 23 November 2006.

Documents

Transcript of Update on Market Reform Andy Brookes, Brian Austin Market Reform Forum 23 November 2006.