Transcript Tim Carroll - Jan 2010

London
LMG Secretariat
Market Group
Future Processing in the
London Market
Tim Carroll, Canopius
LMG Forum, 29th January 2010
With
With
London Market Group
Agenda
• Where are we now?
• Why do we want further change?
• Progress to date
• What has been proposed?
• Expected benefits
• Next Steps
• Questions
London Market Group
Where are we now?
• 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 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
Progress to date
• Current processes for central services mapped to a detailed
level
• Future models proposed
• Future mandatory and optional central services proposed
• Workshops held with Heads of Associations and Lloyd’s
• Future Process Working Group established…
Progress to date (cont.)
London Market Group
•
The Future Process Working Group has:
– Agreed a set of principles that should underpin any future model eg
– Insurers have the choice to perform certain functions themselves or to outsource to a third
party.
– The Future Process Model will support both face-to-face and entirely electronic trading and
negotiation.
– The Future Process Model should benefit all practitioner firms in the London Market.
– The Future Process Model should retain the benefits of the subscription market
– There will be a core central service that monitors the overall status of transactions and which
aggregates carrier responses in support of subscription business processing.
– Recommended to the LMG, which agreed, 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 direct and more efficient process for
global brokers => more choice for clients (and potentially lower
cost)
Proposed next steps
London Market Group
•
Make sure we have the right governance in place – proposal
Proposed next steps
London Market Group
•
2010
– Stage 1: Q1
–
–
–
Market communication
High level cost / benefit analysis
Risks/issues/benefit analysis of each service model
– Stage 2: Q2/Q3
–
–
–
–
Develop process models to lower level
Address risks/issues
Identify transition/implementation options
Re-assess/update Working Group’s Principles & Assumptions
– Stage 3: Q4 2010 / Q1 2011
–
–
•
Market consultation
Finalise proposals/documentation
First implementations of programme in 2011, likely to
commence with 100% written business followed by
subscription business
London Market Group
Questions?