Transcript A&S - London Market Group

Market Reform
Programme Office
Reform Update
Market Forum, 22 February 2006
James Willison
Contract Certainty
Contract Certainty
• The Market is making good progress toward the implementation of
the Contract Certainty Code of Practice
– This fact is recognised by the FSA
– Data on the Market's achievement of the first target will be available in
March
– Based on broker data received thus far we anticipate that this target will be
achieved
• Meeting the end 2006 target, however, remains challenging.
– Further guidance to assist the Market in moving towards this target will be
released by the end of February:
 Model Signing Provisions
 Late Placements
• 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 1
Settlement
Accounting
Certainty
Contract&
Contract Certainty
Page 2
• Market target quality of slip rated at 97% for Dec 05 met
• 59% of slips were 100% compliant to the LMP checklist
• All LMA and LMBC members have signed off the CC Code of
Practice at Board level
• QA tool pre-bind rationalisation
• Legacy Code of Practice published 17th February
Settlement
Accounting
File
Claims
Electronic &
Electronic Claims File
Page 3
• On track for software delivery to allow electronic claims in
the Lloyd’s market
• 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
Electronic Claims File
Electronic Claims File
Page 4
• SP&P on target for completion by end of Q1 (includes
market input from managing agents, brokers, XCS, XIS and
MRPO).
• London Market ACORD DRI Technical Implementation Group
progressing well with work on manual for electronic transfer
of documents using (ACORD DRI) international standards
for end Q1 2006.
• Plan for common claims procedure in London (Q1 update).
Settlement
Accounting
File
Claims
Electronic &
Electronic Claims File
Page 5
• Deliver Lloyd's electronic infrastructure into market testing
(Q2). On target to start MAT on Monday 15th May 2006.
• Press Release on firms committing to process 100% of new
claims electronically due out next month. Will include a
minimum of four large brokers and nine Lloyd's Managing
Agents (with XCS support).
• LMA presentation to its members on Tuesday 21st March,
LMBC presentation to its members on Thursday 20th April
(both Old Library).
• Next forum Wednesday 22nd March
Market Reform
Programme Office
Accounting & Settlement
The Way Forward
John Wingrove
Accounting & Settlement
Agenda
Page 7
• Restatement of A&S objectives
• Workstreams
– Measurement
– Repository
– Radical/ Strategy
• Questions
Accounting & Settlement
Restatement of A&S Objectives
Page 8
• Rationalise and streamline business processes, specifically:
– Speed up premium and claims payment
– Remove reliance on paper
– Reduce errors and reconciliation by capturing richer data once
– Enable back office rationalisation
– Introduce flexibility - process the way the business requires
rather than the business being driven by constraints
• Implement international standards for the communication and
processing of accounting & settlement data (the ACORD XML
RLC standards)
• Provide a firm base for the future
Accounting & Settlement
Three A&S Workstreams
Page 9
• Measurement
• Repository
• Strategy/ Radical
Accounting & Settlement
Measurement
Page 10
• Introduction of benchmarking and monitoring of market
performance in area of accounting, will begin with existing
Stage One process
– Covers both the timeliness and quality of broker submissions
• Accounting checks will be documented and published, via a QA
Tool and within the design documentation
– MRPO documents for measurement and strategy/radical will
include procedures for submissions, replacing elements of
LPSO and LPC manuals
• We will strive for quick wins in performance and adoption of
A&S principles ahead of full A&S implementation
Accounting & Settlement
Measurement
Benefits and Implications
Page 11
• The validation and processing rules that the Market needs to
work to will be available fully to both brokers and carriers
• Updated documentation will also assist those not familiar with
London market, especially the newer overseas brokers
• 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
• Potential for faster premium processing due to less rejections
• Reduced reconciliation errors on receipt of signing messages
due to improved data quality
Accounting & Settlement
Measurement
Timescales
Page 12
• Benchmarking & monitoring performance graphs to be
available during March
• Accounting checks to be available approx end 1st Qtr
• Procedures for paper, repository and electronic submissions
to be available by end of 2nd Qtr
Accounting & Settlement
Page 13
•
Measurement
•
Repository
•
Strategy/ Radical
Accounting & Settlement
Repository
Page 14
• MRG and A&S PB have approved Xchanging as supplier
• Broker loads slip, LPANs and supporting documentation to
repository thereby removing paper (and vans)
• Carriers can gain access
• DRI enabled repository that also enables direct loading and
enquiries to:
– deliver documents to Xchanging Ins-Sure Services for
checking
– deliver documents directly between brokers and carriers i.e.
in support of non-bureau or P2P processes
Accounting & Settlement
Resultant Bureau Premium Submission Processes
Page 15
WORK SUBMISSION
METHOD
XIS LOGISTICS
XIS CHECKING
BROKER
PAPER
EMAIL
XIS RECIEVE
WORK
PACKAGE
XIS CHECK
WORK PACKAGE
PREPARE / UPDATE
PREMIUM SUBMISSION
DRI PUSH
WORK PACKAGE
COMPLETE?
YES
QUERIES?
YES
SEND TO XIS
DRI PULL
NO
NO
PREMIUM
SIGNED
DIRECT
LOAD
Accounting & Settlement
Repository
Benefits and Implications
Page 16
• Faster turnaround times for documentation since “van time”
is eliminated.
• No “van time” and speedier query resolution means signed
lines available quicker
• 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)
• Gives insurers access to a copy of the slip and other
premium submission documentation in the repository
• Utility function of the repository, without XIS processing,
allows broker to distribute documents in a controlled
manner to specified parties
Accounting & Settlement
Repository
Timescales
Page 17
• Project documentation sign off – Date TBA
• Build time - this is being delivered in three releases
• Release 1
– MAT Dates - June 2006 for release 1
– Go Live dates - September 2006 for release 1
• Releases 2 & 3 tba
Accounting & Settlement
Page 18
•
Measurement
•
Repository
•
Strategy/ Radical
Accounting & Settlement
Strategy / Radical
Page 19
• Review instigated by the MRG
• The A&S Board confirmed they were committed to the
vision of adopting ACORD standards for messaging
• The Board short listed eight implementation options and
carried out analysis and evaluation
• They concluded the Market should adopt a model based on
a global point to point solution, allowing each carrier their
choice of service provider. In essence this is today’s nonbureau process
• The MRG requested that the model should be proposed to
Market Associations for agreement. Market Association
responses favourable – “Move to next stage”
Accounting & Settlement
Strategy / Radical
Key Features of Approach
Page 20
• The broker will deal directly with the carrier(s)
• 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
• Mirrors the Electronic Claims File implementation of broker to
carrier trading partnerships
• 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)
Accounting & Settlement
Strategy / Radical
Benefits of approach - Brokers
Page 21
• Promotes process efficiencies
– Potential to implement straight through processing
– Re-use of broker keyed data reduces re-keying and
reconciliation
– Consistent data usage makes supporting clients more efficient
– Validation at source reduces rejections and frictional costs
– Faster payment cycles and reduced administration costs
• Reduces barriers to business e.g. removes Londonism’s
– International data interchange standards ensures business can
be transacted consistently throughout the world
– Movement of non fundamental accounting splits reduces
administration costs
– Deferred treated as individual instalments, released as funds
received
Accounting & Settlement
Strategy / Radical
Benefits of Approach - Carriers
• No large investment in central infrastructure envisaged
• Promotes process efficiencies
– Allows 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
received from around the world
– 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 22
Accounting & Settlement
Strategy / Radical
Challenges
• Encouraging broker and carrier investment in change and
their acceptance of transition costs
• Identifying early adopters and progressing take up
• Legacy business processing between trading partners
adopting at a different speed
• Implications of a long tail from first to last adopter
• Accreditation of service providers and smooth interaction of
multiple service providers
•
Impact on other initiatives and business relationships, such
as A&S Repository, Claims, XCS, Contract Certainty
• Impact on claims agreement practices and Lloyd’s claims
scheme
• Ability to continue to support reporting [mainly Lloyd’s]
Page 23
needs in a new environment
Accounting & Settlement
Strategy / Radical
Next Steps
Page 24
• Continue to raise general awareness and validate the
proposals more widely (December 2005/January - February
2006)
• Develop plan for service provider accreditation (1st Qtr
2006)
• Update Detailed Business Design and Technical Information
documents (before end of 2nd Qtr 2006)
• Document and design Implementation, Transition and
Legacy processes (before end of 2nd Qtr 2006)
• Confirm the role of trading partnerships in implementation
and roll out (tba)
• Identify Implementation Champions (tba)
Accounting & Settlement
Questions
Page 25
Now
Or offline to:
Measurement
Brian Austin
020 7327 5247
[email protected]
A&S Repository
Elaine Nutton 020 7327 6607
[email protected]
Radical/ Strategy
Paul Tuvey
020 7327 5248
[email protected]