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London LMG Secretariat Market Group Future Processing Model Working Group Introduction Simon Collins 18th March 2010 With With London Market Group Agenda • Background • What has been proposed? • Project Governance • Project Deliverables • Timescales • How will the Working Groups work? • Questions London Market Group Project business drivers • Close to finishing latest round of reform • Xchanging provides: – Economies of scale – Single point of audit for regulators – Consistent process, standards & SLAs – Pool of resource; reduced insurer overheads – Common infrastructure for the market • Still have legacy issues • Still have too many Londonisms London Market Group Why do we want further change? • Information is rekeyed numerous times throughout the process – leading to significant query and error rates • A growing number of Lloyd’s market organisations want the same choice as Companies and the option to either outsource some processes to a different supplier, or perform them in-house • There is a perception that overseas brokers are placing certain types of business elsewhere as result of London’s complex operating environment • Initiatives such as Finish What We Started are improving processing, but still based on legacy systems and inherent Londonisms London Market Group Background • Current processes mapped to a detailed level • Future models proposed, featuring mandatory and optional central services • Workshops held with Heads of Associations and Lloyd’s • 2009 Future Process Working Group established. – Agreed a set of principles that should underpin any future model – Recommended to the LMG that the proposed future process is workable and warrants much more detailed design • An LMG-sponsored project has been initiated to deliver: – A robust London Market process model, expressed in sufficient detail that it can be adopted and implemented by the market. – A recommended transition/implementation plan; likely to identify a two stage approach, with a new model for 100% written business as the first implementation, followed by subscription business London Market Group What has been proposed? • Move to electronic “straight through processing” and reuse of information throughout the value chain (i.e. without any need for re-keying) • Adoption of ACORD standard messages throughout the risk lifecycle • Provide insurers with central core services and the option to select from a suite of supporting services, or to undertake processes themselves London Market Group The expected benefits • Throughout 2010 the project will seek to validate the below benefits and ensure that they are built into any future model design • Insurer benefits: – Choice - perform services in-house or outsource to another party – Cost reduction - processing costs will be reduced by reusing data and decreasing transactional query costs – Reduced operational risk - access to risk data earlier in the process, allowing for improved exposure management – Opportunities to automate various processes London Market Group The expected benefits • Broker benefits: – Consistent processes - working in accordance with global (ACORD) processing standards; leading to a consistent process across many markets using the same process and data – Direct interface to insurers - ability to interface directly with insurers using standard data; vastly reducing re-keying and query rates throughout the risk lifecycle – Opportunities to automate various processes – Easier to access London market – allows small/medium overseas brokers to access the market directly and provides more efficient process for global brokers => more choice for clients (and potentially lower cost) London Market Group Project Governance London Market Group Project Deliverables • Detailed process maps: for the entire risk lifecycle; i.e. placing, accounting, settlement, claims and reporting. Differences and variations to the process should also be documented, for example for different classes of business. • Rule book: The process maps must be supported by a rule book providing narrative for processing all types of business via the future processes. • Referencing structure: A signed-off document detailing the referencing structure and associated rules for future risks and claims. • Data maps: Data maps that show where specific data items are captured in the process, where they are reused and their optionality. • Definition of central services: A definition of the central services that will support the Future Processing Model, whether they are mandatory or optional and whether the service will be offered by a single supplier or possible multiple suppliers. • Implementation plan: A plan that details the key tasks and timescales for implementation, including options available for transition. • Cost Benefit Analysis: A breakdown of the costs and benefits associated with implementing the future model. Timescales London Market Group • LMG have set the following deadlines: – Accounting & Settlement December 2010 – Claims December 2010 – Placing Early Q1 in 2011 – Facilities & Binders Early Q1 in 2011 • A detailed project plan is currently in draft format and is due to be considered by the Steering Group at its March meeting • Working Groups will be free to alter their own plans, provided that the signed-off milestones are not affected London Market Group How will the Working Groups work? • Up to the Working Groups! But: – Within the scope of the project • Draft plan will be presented to the group for consideration • Analysis by project team, review by groups • Review process maps, messaging, referencing, supporting narrative, definitions of services, etc • NOT starting from scratch – 2009 work forms the basis going forward – Principles and assumptions – Process maps – Items for further consideration London Market Group Example of 2009 work London Market Group IDEF0 Process Maps London Market Group Further information • For further information regarding the Future Processing Model project please visit the LMG website: www.londonmarketgroup.co.uk • Here you will find, amongst other things: – The Project Initiation Document (scope, deliverables, success criteria, etc) – Terms of reference for all project groups – Proposal to MRG (now LMG), including 2009 process maps and the principles & assumptions underpinning the project London Market Group Questions?