Transcript Market Reform Forum - London Market Group

Market Reform Office
Market Reform Forum
Andy Brookes, MRO
Jon Faulkner, Xchanging
Helen Dines, Willis
Thursday 25 October 2007
Market Reform
Market Reform Update
Page 2
• Developments in the past month
• Upcoming work and plans
• Special topic – Electronic Policies
– Jon Faulkner, Xchanging
– Helen Dines, Willis
Contract certainty - Headlines
• Performance continues to exceed 90% target – August brokers’
Market Reform
achievement rate – 96%
• …..in line with managing agent (93% Sept) and company data
(97% Aug)
Overall Contract Certainty achievement
100%
90%
80%
Jan
Feb
Mar
Broker CC rate
Page 3
Apr
May
Jun
Jul
MA CC rate
CC MRG target
Aug
Sep
Oct
Nov
Dec
Company CC rate
Contract Certainty Survey - results
Market Reform
• Key message: “Improvement and, crucially, no
deterioration in a year of less intensive regulatory
scrutiny”
• Key stat – the proportion of firms which regard their
systems and controls for achieving Contract Certainty
to be either ‘embedded’ or ‘very well established’ in
their business as usual operations up to 83% from
74%
• 168 firms responded (163 last year)
Page 4
Market Reform
Contract Certainty: Systems and Controls
% of firms: total market
3%
6%
8%
Page 5
44%
39%
Substantially underdeveloped
Underdeveloped
Well established
Very well established
Embedded
Contract Certainty – next steps
Market Reform
•Play back survey results to FSA
Page 6
•Propose end to central measurement from
end 2007
•Down to individual firms to demonstrate
performance to the regulator when asked…
Legacy
• Lloyd’s index currently 37% September
Market Reform
• IUA 41% August
– Ahead of year end target; but do not stop
Legacy Index
100
80
60
40
20
0
Jan
Page 7
Feb Mar
Apr
May Jun
Jul
Aug Sep
Oct
Nov Dec
Lloyd's Index
Interpolated quarterly target
Quarterly target
Company market index
Legacy in 2008
Market Reform
• Need approach to deal with residue
• Cases where “current documentation prevails” is the
best answer
– Insufficient counter parties still in existence
– Live claim in progress
– Little potential for a claim
• Client’s requirement rules
• New ‘Principles and Guidance’ (2 pages) with FSA
Page 8
• Published shortly
Market Reform Contract
• New “slip” standard published in June. Mandatory
Market Reform
in Lloyd’s market from November 1
Page 9
• Q&A from market sessions and from issues raised
with Associations on MRPO website
• Binders and Lineslips
– Working on any required changes
– Unlikely to be mandatory before 01/01/08
ECF
• Lloyd’s ECF take up
Market Reform
– Behind run rate, but substantial progress
– 45% of in scope Lloyd’s claims (4 week average to end
Sept)
– Over 50% in October
Lloyd's ECF proportion of total in scope new
claims
100%
80%
60%
40%
20%
0%
Jan
Page 10
Feb
Mar
Apr
May
Lloyd's ECF proportion
Quarterly target
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Interpolated quarterly target
ECF
Market Reform
•Rollout
–All Managing Agents open for all business
–48 brokers live (80% of total volume), listed on
website
–Further 45 to be added by end 2007 (98% of
volume)
–© 20 IUA companies live or going live
• LMBC to distribute data to brokers on their take-up
• Managing agent data available from Lloyd’s FPD
Page 11
ECF : Live issues
• Prioritising Phase 7 changes
Market Reform
– Aim to get all new claims in scope
• Access Control List
– Work arounds available from late November
• IUA changes
– Eg Flag in Company Market CLASS : “using IMR for this claim”
– Late November live
• Contract for IMR use
– Getting sorted, but still slow
• Best practice workshop
– will publish tips; contact [email protected]
Page 12
• Operational standards being developed
Market Reform
ECF – how to drive up usage in your firm…
Page 13
Market Reform
Accounting and Settlement
• A&S use of IMR: rising but still disappointing
• 25% electronically 4 weeks to mid October
– should have been 60% in September
– Over 30% most recent week
• 36% of Original Premiums
– APs more difficult if OP was in paper
• 80 firms now ‘switched on’ (90+% of total volume)
• Plan for end of OP van service for A&S 1/4/08
• Phase 3 MAT in progress
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– Proportional treaty, ACL work arounds
A&S electronic submission as proportion of total
Market Reform
100%
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80%
60%
40%
20%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
A&S electronic proportion
Interpolated quarterly target
Quarterly target
OP only electronic proportion
A&S Delinking
• Slightly below
target ( >60% by end Q3) at 56% but
Market Reform
seasonal…
• MRG reviewing ‘end date’.
Includes addressing any blockers.
• Brokers receiving individual reports on delinking performance
Delinked rate
100%
80%
60%
40%
20%
0%
Jan
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Feb
Mar
Delinked rate
Apr
May
Jun
Jul
Aug
Interpolated quarterly target
Sep
Oct
Nov
Dec
Quarterly target
Delinking – year on year comparison
70%
Market Reform
60%
50%
40%
30%
20%
10%
0%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
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2007 Delinked %
2006 Delinked %
2005 Delinked %
Nov
Dec
Electronic Placement
• LMA Bulletin issued on 16th August (via Associations or see
Market Reform
www.the-lma.com)
• Electronic Placing Steering Group in place
• LMA have developed a briefing pack for all interested participants
• Peter Holdstock
– 020 7327 8383
– [email protected]
• Rob Gillies
– 020 7327 8377
– [email protected]
Page 18
Other news…
Market Reform
• MRG chair – Stephen Matanle from Jan 2008
• MRG developing plans for 2008
– Welcome input
– Email [email protected]
• ‘Beginners’ sessions scheduled
• Want to talk…?
– General reform updates/discussions
– Specific topics – MRC, IMR etc
– Email [email protected] to arrange
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