Transcript A&S

Market Reform
Programme Office
Market Reform
Solution Providers Forum, 17th March 2006
Purpose of this forum
• Communication of …..
Market Reform
– Objectives
– Progress/ Key messages
– Future plans
• Interaction
– An opportunity for you to discuss reform issues together
• Feedback
• Not part of the governance i.e. Not a decision making forum
Page 1
Agenda
Market Reform
• MRG Objectives 2006
Page 2
• Progress / key messages
– Contract certainty
– Claims infrastructure
– A&S
• Discussion
• Date of next meeting & ideas for agenda
MRG Objectives 2006
Market Reform
Contract Certainty
•
Market achievement of monthly volume of certain contracts (30% by Q4 05, 60% by Q2,
85% by Q4)
•
•
•
•
•
•
Market slip compliance rated 99% (Q1); 85% of slips fully compliant (Q4)
Resolve signed lines, late orders and other outstanding contract certainty issues (Q2)
Clear plan for continued improvement of CC in 2007+ (Q3)
Avoid regulatory intervention
Build user-friendly front-end for contract certainty checks (Q1)
Market feasibility for next stage of development of QA tools (Q4)
Accounting & Settlement
•
•
Establish measurement regime (Q1); publish accounting checks (Q1)
For ACORD international standard A&S processes:
– Agree and document outline processes (Q1)
– Publish detailed technical and business information (Q2)
– Agree implementation plan (Q2)
– Secure public commitment to implementation by brokers and carriers; with timetable
for migration from old processes (Q4)
•
Page 3
Implement A&S repository (Q4)
MRG Objectives 2006
Market Reform
Claims Infrastructure
Page 4
•
•
Publish processes and procedures for electronic claims – Lloyd’s first (Q1); IUA next (Q4)
•
•
•
•
Plan for common claims procedure in London (Q1)
•
Set strategy for claims infrastructure beyond ECF (Q4)
Publish implementation manual for electronic transfer of documents using (ACORD DRI)
international standards (Q1)
Complete IUA repository pilot and agree next steps (Q2)
Deliver Lloyd's electronic infrastructure into market testing (Q2)
(At least 4) brokers and (9) Lloyd’s Managing Agents processing 100% of new claims
electronically, supported by XCS (Q4)
Other
•
•
•
Publish legacy Code of Practice (Q1); measured progress against code (Q4)
Measure use of new infrastructure and business benefits (on-going)
Training: ‘approved’ courses for contract certainty (Q1); framework for claims training (Q2);
participation targets (Q4)
Progress
Market Reform
• Contract Certainty
Page 5
• Claims Infrastructure
• A&S
Contract Certainty - highlights
Market Reform
• LMP Slip Quality
– Market target quality of slip rated at 97% for Dec 05 - met
– 59% of slips were 100% compliant to the LMP checklist
• Market Guidance
– All LMA and LMBC members have signed off the CC Code of
Practice at Board level + 85% of IUA members
– Late Placements & Legacy Code of Practice published
– Model Signing Provisions – agreed, subject to legal review
• Lloyd’s specific
– Policy checks codified (QA Tool)
– Confirmation of pre-bind checks underway
Page 6
Contract Certainty - highlights
Market Reform
•
CC Implementation
– The Market is making good progress toward the implementation of
the Contract Certainty Code of Practice
– This fact is recognised by the FSA
– December CC statistics published
– Market average (open-market + binders) @ 65%
– Encouraging start – but it is only the beginning
– Meeting the end 2006 target, however, remains challenging.
•
FSA Liaison
– The FSA is currently in dialogue at senior executive level to assess
what its next steps should be.
– We will know by the end of March as to whether the FSA will move
to consultation around implementation of rules or not.
Page 7
Market Reform
Claims Infrastructure
Page 8
Market Reform
Claims Infrastructure - Summary
Page 9
•
On track for software delivery to allow electronic claims in the
Lloyd’s market using ACORD DRI
•
Early implementation partnerships growing
•
Substantial testing and implementation task this year
•
Will change working practices from paper to electronic for many
claims practitioners
•
Named brokers and Lloyd’s managing agents committed to 100%
of new Lloyd’s claims from Q4 2006
•
IUA coming on board
Market Reform
Electronic Claim Files- a Critical Requirement
Page 11
•
Enable parallel presentation to insurers
•
Reduce overall transaction time
•
Improve transparency of process
•
Underwriters can control their own work load
•
Allow brokers to concentrate on those claims where value
is added
•
Claim file always available to insurers
•
Fundamental pre-cursor to the LMP objective of
streamlined claims agreement
Repositories
Market Reform
•
Multiple repositories in the London market
– Brokers and carriers have their own
– Carriers shouldn’t have to learn different brokers’ repository
dialects
•
Insurers’ Market Repository
– To hold electronic claim files for carriers
– International ACORD Document Repository Interoperability
(DRI) standard to exchange documents
– CLASS will manage the claims transactions.
Page 12
Market Reform
Technical Governance
Page 13
•
London Market ACORD DRI Technical
Implementation Group
•
Virtual Cross A&S/ECF Project Board
Overall Scope
Market Reform
•
Deploys CLASS in the Lloyd’s market
– acts as a simple workflow manager of claims transactions
•
Delivers an interactive Insurers’ Market
Repository to carriers (a shared electronic filing
cabinet)
– Interactive service available to brokers subject to XIS contract
•
Adopts ACORD standards for the transfer of
electronic documents
– To/From brokers’ repositories (at no charge to brokers)
– To/From carriers’ repositories
Page 14
LMA Project Scope
•
Implements CLASS at Lloyd’s
– To support Lloyd’s Claims Schemes
Market Reform
•
Integrates CLASS and IMR
– a single electronic claims service for Lloyd’s managing agents
•
Does NOT change CLASS for brokers
– Multiple interactive services: one for each market
– LIMCLM: operational for IUA
– defined and trialled for Lloyd’s
IUA Project Scope
•
3 month pilot of Insurers’ Market Repository
– To identify any additional IUA requirements
– Expected start during Q2 2006
•
Does NOT
– change IUA CLASS (Operational since 1987)
Page 15
– change CLASS for brokers
Implementation
Market Reform
• Broker-driven
– with Lloyd’s and IUA carriers and XCS
– by classes of business and risks
– programme office monitoring progress
• New claims and their subsequent transactions
– Existing paper based claims (legacy) to be tackled later
• Early Implementations
– Using today’s CLASS and repository in parallel with the enhancements
– Gives early experience of electronic work and assess impact on procedures
and processes
Page 16
Market Reform
Early Implementers
Page 17
Brokers
Carriers
•
•
Aegis
•
Ace
Marine Hull
•
Amlin
•
AIG
Aviation Direct
•
Chaucer
•
Advent
Reinsurance
Benfield
Class of Business
•
Cooper Gay
•
Guy Carpenter
•
Faraday
•
Atrium
PI
•
Marsh
•
Hiscox
•
Well’n
•
Kiln
•
Heritage
Non Marine
Property
•
Limit
•
Aspen Re
•
MAP
•
XCS
•
Millers
•
Willis
•
Aon (waiting for full DRI) • St Paul Travelers
•
MAP
•
Markel
•
Brit
Binding Authorities
FinPro
Market Reform
Carriers Wanting to Participate (in the pipeline)
Page 18
–Allianz
–Beazley
–Global Aerospace
–Liberty
–Munich Re
–SVB
–Swiss Re
–XL Re
Market Reform
Public Commitment to 100% Target
Brokers
Managing Agents
Committed to deliver new claims
to Lloyd’s electronically
Committed to deal electronically
with new claims
Aon
Brit
Faraday
Hiscox
Limit
Marlborough
St Paul Travelers
SVB
Benfield
Marsh
Active support from:
Cooper Gay
Guy Carpenter
JLT
Wellington
Millers
MRPO Seeking others through
early implementers, testers and
others
Willis
Page 19
Amlin
Next Steps
Market Reform
• Phase 5 delivery to MAT mid-May 2006
Page 20
• Delivers first version
– of an integrated electronic claims service for Lloyd’s
– replicating existing file electronically
– with improvements where possible
– companies and syndicates can see the same claim
• Things change and we won’t have thought of everything
• There will be more issues and enhancements
Market Reform
Accounting and Settlement
Page 21
A&S Objectives
• Rationalise and streamline business processes, specifically:
Market Reform
– Speed up premium and claims payment
– Remove reliance on paper
– Reduce errors and reconciliation by capturing richer data once
– Enable back office rationalisation
• Implement international standards for the communication and
processing of accounting & settlement data (the ACORD XML RLC
standards)
Three workstreams ……
– Measurement & checks
– Strategy - ACORD messaging
– Repository
Page 22
A&S Measurement & Checks
• Introduction of benchmarking and monitoring of market performance
Market Reform
in area of accounting, will begin with existing Stage One process
• Accounting checks will be documented and published, via a QA Tool
and within the design documentation
• The validation and processing rules that the Market needs to work to
will be available fully to both brokers and carriers
• Brokers should build the documented validation checks into their
systems to prevent errors at source
• Improving presentation quality and reducing rejections drives down
costs for all and gives potential for faster premium processing due to
less rejections
• Reduced reconciliation errors on receipt of signing messages due to
improved data quality
Page 23
A&S Measurement & Checks
• Benchmarking & monitoring performance graphs to be available end
Market Reform
of March
Page 24
• Accounting checks to be available approx end 1st Qtr – initial
delivery; further delivery Q2
• Procedures for paper, repository and electronic submissions to be
available by end of 2nd Qtr
A&S Strategy - Key Features of Approach
• The broker will deal directly with the carrier(s) using electronic
Market Reform
(ACORD) messages
• The carrier(s) will have the choice to retain in-house or outsource
services where they view a business benefit. This will be transparent
to brokers
• Supports early adopters by enabling migration with trading partners
as soon as they are able
• Significant departures from today’s environment are:
– There can be one or many service providers operating in the market
– Service providers will “sit behind” the carrier
– Roles will move to the appropriate responsible parties (e.g. Risk
carriers become responsible for accounting splits)
Page 25
Strategy
Benefits of Approach
• Promotes process efficiencies
Market Reform
– Potential for straight through processing, with greater automation
– Re-use of data captured at source reduces re-keying and
reconciliation
– Consistent data definition makes interfaces more efficient
– Faster payment cycles and reduced administration costs
• Reduces barriers to business
– International data interchange standards will ensure business can be
transacted consistently with other markets
– Carrier adoption of non fundamental accounting removes Londonism
and cost for business producers
• Promotes competition
– Competition amongst additional service providers should lead to
competitive pricing structures and service levels
– Current service provider can re-position offerings for new approach
Page 26
Strategy
Challenges
• Encouraging broker and carrier investment in change and their
acceptance of transition costs
Market Reform
• Identifying early adopters and progressing take up and managing
Page 27
legacy. Implications of a long tail from first to last adopter
• Role of service providers and smooth interaction of multiple service
providers
• Impact on claims agreement practices and Lloyd’s claims scheme
i.e. how to run a P2P approach along with a claims scheme
• Ability to continue to support reporting needs [mainly Lloyd’s] in the
new environment
Strategy
Next Steps
• Update Detailed Business Design and Technical Information
Market Reform
documents (end of 2nd Qtr 2006)
Page 28
• Document and design; Implementation, Transition and Legacy
processes (end of 2nd Qtr 2006)
• Confirm the role of trading partnerships in implementation and roll
out (tba)
• Identify Implementation Champions (tba)
Repository
• Broker loads slip, LPANs and supporting documentation to the
Market Reform
repository thereby removing paper and the inherent transportation
issues
• Gives insurers access to a copy of the slip and other premium
submission documentation in the repository
• DRI enabled repository that also enables direct loading and
enquiries to:
– deliver documents to Xchanging Ins-Sure Services for checking
– the Utility function of the repository, without XIS processing, allows
brokers to distribute documents in a controlled manner to specified
parties i.e. in support of non-bureau or P2P processes
• It is the same physical repository as used for ECF
• DRI functionality consistent with ECF.
Brokers have options on
how to connect, DRI Push, DRI Pull or Direct load (or additionally
email for delivery to Xchanging for checking)
• Faster turnaround times for documentation, and speedier query
resolution means signed lines available quicker
Page 29
Repository
Market Reform
• Project documentation sign off – Imminent
• Build is being delivered in three releases
• Release 1
– MAT Dates - June/July 2006
– Go Live dates
• Releases 2
– TBA
•
Release 3
– TBA
Page 30
- September 2006
Market Reform
Page 31
WHAT MIGHT YOU NEED TO
THINK ABOUT OR TAKE ACTION
ON NOW?
Key thoughts for suppliers - Repository
• Early review of documentation – when published (on website)
Market Reform
• Consider – with your customers – how they initially wish to
connect and what their path to ultimate connection would be
• How and when you can deliver to assist them; how will your
systems work alongside?
• How you can assist your customers to participate in testing?
• Are you members of ACORD?
• Are you familiar with the ACORD DRI standards?
• Do you understand the ACORD certification process?
Page 32
Market Reform
Page 33
Discussion / Questions?
Next meeting
Market Reform
• Date
• Ideas for agenda
www.marketreform.co.uk
Page 34