Transcript A&S - London Market Group

Accounting &
Settlement
A&S
An outline of the
Accounting & Settlement
Project
14th December 2004
What are the A&S reforms?
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Modernising the transaction processing
infrastructure within the London market by
implementing the use of international standards
for the communication, and processing of
accounting & settlement data
(the ACORD RLC XML standards)
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Accounting &
Settlement
To move away from bespoke, to “international”
To implement common processes
To provide a firm base of infrastructure for the future
with flexibility for future business process change
Rationale for change
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Reduces errors and reconciliation issues
Enables back office rationalisation
Provides data faster/earlier
Enables more accurate data – pre validation
Aligns with international approaches
Provides flexibility
Reduces costs
Accounting &
Settlement
What changes are involved?
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Provision of data electronically using ACORD message
standards & repositories from;
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London brokers,
Broker’s overseas parents/sister brokers,
other intermediaries,
including via electronic placing environments.
Underwriters receiving and processing ACORD standard
messages,
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Accounting &
Settlement
for bureau business in place of current bespoke messages
for any non-bureau business direct from sender
These processes are fully “delinked” i.e. technical accounting can be
separated from settlement and processed much earlier than today for bureau
business.
ACORD – RLC XML message suite
Business Name
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XML Name
Accounting &
Settlement
Usage for A&S
Placement Message
Placement
Issuance of a post placement
contract structure in receiver
subsequent transactions
Technical Account
TechAccount
Establishment of transactional
premiums and claims
Financial Account
Settlement
Release of debt for settlement,
AND as settlement statement
Claim Movement
ClaimMovement
Establishment of claims records
movements
Acknowledgement
Acknowledgement
Acknowledging receipt and
responses to messages received.
every individual ACORD message
De-linked
Premium accounting process flows now
BROKERS
UWRS
Paper Closings (non-bureau)
Statements (non-bureau)
Paper LPANs
USM
Paper Slips
Paper TTYs
Paper Supp Docs
XCHANGING
(bureau)
DSIGN
ILUCSM
Paper Slips SNAD
BSM
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Accounting &
Settlement
Premium accounting process flows future
BROKERS
Accounting &
Settlement
UWRS
ACORD messages (non-bureau)
ACORD Acknowledgements (non-bureau)
ACORD msgs
Electronic Slips
Electr Supp Docs
ACORD Acknmnts
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ACORD msgs
ACORD Acknmnts
XCHANGING
(bureau)
Accounting &
Settlement
Claim accounting process flows now
BROKERS
UWRS
Paper Claim Closings (non-bureau)
Statements (non-bureau)
Paper LCCFs
SCM
LIMCLMs
LIMCLMs
CLASS on-line
Paper Claim Files
Paper Supp Docs
SNAD
BSM
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XCHANGING
(bureau)
USM
DSIGN
ILUCSM
Accounting &
Settlement
Claim accounting process flows future
BROKERS
UWRS
ACORD messages (non-bureau)
ACORD acknowledgements (non-bureau)
ACORD msgs
Electr Claim Files
Electr Supp Docs
ACORD Acknmnt
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ACORD msgs
ACORD Acknmnt
XCHANGING
(bureau)
Accounting &
Settlement
Scope
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The process covers:
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Out of scope are:
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Direct
Reinsurance
Facultative, proportional and non-proportional
Lloyd’s and London companies
Bureau and non-bureau
London broker, other broker, client
Premiums and claims
Inward and outward transactions
Placing processes (However does use Placement Message as
start of A&S process)
Claim agreement processes
(although use of ACORD messages to support claim agreement
are part of the Xchanging development)
Accounting &
Settlement
Governance (above A&S Board)
Influences
STRATEGY
Market Reform Group (MRG)
•approving strategy
•commitment
•setting priorities
‘DESIGN’
MRG Executive
•proposing strategy
•market-wide buy-in
•managing resources
•defining projects
•feasibility
IMPLEMENTATION
chairmen and
reform champions
LMA, LMBC,IUA,
Lloyd’s
LMA CEO, Lloyd’s
COO/s, IUA CEO, LMBC
CEO, franchisor
MR Implementation Board
•market wide implementation Major brokers, major
managing agents, major
•scope creep
companies, Xchanging
•conflict resolution
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PROJECT
A & S PROJECT BOARD
Reports to
LMA Board
LMBC Board
IUA Board
Franchise Board / Council
Accounting &
Settlement
Board Membership
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A&S Project Board
 Design & development
 Delivery of functionality
 Proposals to MRIB on
implementation
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Members
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Andy Brookes –(Chair) Lloyd’s BPR
Roy Alexander - Chaucer
Stephen Anderson – Catlin
John Bacon – Guy Carpenter
Mark Barwick - LMBC
Mick Dempsey – Global Aero
Geoff Kennard – Xchanging
Dave Matcham – IUA
Rob Myers – Xchanging
Mike Reidie - Marsh
Phil Romano – Kiln
Ian Summers – Aon
Pat Talbot – Alea
David Williams – QBE
John Wingrove – Project Manager
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MRIB
 Implementation approach
 Delivery of own firm and hence
market
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Members
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Iain Saville (Chair) Lloyd’s
Tom Bartleet – Willis
Andy Brookes – Lloyd’s
Clive Buesnel – Xchanging
David Harris – Amlin
Hugh Maltby – BRIT
Andy McDonald – Benfield
Patrick Mina – Marsh
Edward Moss – Catlin
Paul Moss – QBE
Bill Oram – Aon
Chris Rawson – Lloyd’s & ACORD
Chris Smith – Limit
Alan Tasker – Global Aerospace
Tim Riley - Alea
Next Steps
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Implementation plan from MRIB, with Project
Board input
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Development of Technical Information to support
Business Design (over next few months –
planning underway)
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Accounting &
Settlement
2005: first phases of the build – premium related
transactions likely to be first
2006: Further build phases and grow volumes of
use to critical mass
Accounting &
Settlement
Summary
Purpose
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Implementing the use of international standards for the communication,
and processing of accounting & settlement data
(the ACORD RLC XML standards)
Benefit
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Implementation Cost
Improved processing efficiency
Common processes
Substantial London Market cost savings
(£50m pa)
Firm base for future change
Progress
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Issues
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Further work
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© £7-8m for XIS
© £70m – £80m guestimate for the London
market
The detailed business design is now complete, quick sign-off by Associations
expected
Cost split of £8m between IUA and LMA sorted; broker contribution
Governance in place
Individual firm contributions for funding nearing completion
Sign off of any cost changes to be completed
Implementation plan from MRIB, with Project Board input
Development of Technical Information to support Business Design (next few
months)
2005: first phases of the build – premium related transactions likely to be first,
2006: grow volumes of use to critical mass
So what should you do now?
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Accounting &
Settlement
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Establish who in your organisation should be your driver for these
reforms
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Ensure that you have a good understanding of the new processes
and the implications to your business
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Discuss and agree within your organisation
 What you need to do to your processes to support the changes
 How these will interact with your systems
 What other opportunities that the new process enables do you
wish to take advantage of and how/when you will develop these
opportunities
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Discuss the changes with your software supplier (in-house or
external) and establish their ability to support the changes and their
potential delivery schedule
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Agree within your organisation the delivery path and timetable that
you wish to follow
Questions?
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Accounting &
Settlement