London Market Reforms where are we, where are we heading Software Providers ForumIT Club

1
London Market Reforms- where are we, where
are we heading?Software Providers Forum/IT
Club
Pat Talbot IUA Adam Stafford Lloyds Market
Operations27th September 2007
2
AGENDA

• Overview of London Market Reform Objectives
• Benefits and Status of Insurers Market
  Repository (IMR)
• ECF Benefits and Status
• Questions

3
Objectives

• Rationalise and streamline processes to
• Remove reliance on paper
• Capture data once and once only, re-use
  data/reduce re keying
• Reduce reconciliation/rejection errors
• Introduce flexibility let business requirements
  determine the process, not have the process
  driven by constraints
• Speed up premium/claim agreement and payment
  processes
• Implement ACORD XML RLC standards
• Remove Londonisms
• Enable back office rationalisation
• Enable Global processes

4
Market Reform Strategy

• The medium/long term vision
• Implement ACORD RLC XML Messages for all
  processes where appropriate
• Adopt standard global practices and processes
• Insurers choice of service provider (s) and
  processing approach
• There can be one or many service providers
  operating in the London market
• No more Londonisms
• Brokers account at fundamental split level only
  (Lloyds only)
• Automatic broker funding/payment of deferred
  premiums
• Delinked approach as standard

5
Market Reform Strategy

• All Design and Functional Specification,
  Implementation Guide documents posted to Market
  Reform website
• Current status
• www.marketreform.co.uk
• Next Steps
• Brokers and Carriers need to liaise with trading
  partners to adopt and implement P2P process
  initiatives as appropriate.
• Market Reform Strategy Group (MRSG) made up from
  members of LMBC/IUA/LMA currently identifying
  early Implementers to create a Matrix to enable
  joint ventures to progress.
• Participants and early implementers need to
  review documents to identify key factors to
  enable strategic end vision and the
  implementation steps required to achieve the
  vision.

6
Insurers Market Repository (IMR)

• Electronic Premium Accounting (EPA) electronic
  submission of slips, PANs, policy wordings and
  supporting information by the broker to Xchanging
• Electronic Claim Files in IMR
• Two methods available for submission of EPA and
  Claim documents Direct Load/DRI
• All documents stored in IMR whichever submission
  method used
• IMR will include a structured (i.e. bureau) and
  an unstructured (i.e. non-bureau) area
• UMRs - unique and maintained even if broker of
  record changes mid term

7
Insurers Market Repository

• Benefits to Brokers
• Reduced paper and handling costs
• Faster processing times no van time
• Faster query resolution
• Reduction in rejection rates
• Enhanced audit trial reconciliation
• DRI functionality consistent with ECF
• ECF reduces number of paper claim files in
• marketplace
• Utility function (non bureau), allows document
• exchange between trading partners for P2P
• processing.

8
Insurers Market Repository

• Benefits to carriers
• No van time - speeds up premium processing
• Faster query resolution speeds up premium
  processing
• Signed lines available to all parties quicker
• ECF enables concurrent claims agreement for all
  carriers
• Access to all broker documentation in the IMR
• Utility function (non bureau), allows document
  exchange
• between trading partners for P2P processing

9
Insurers Market Repository Implementation
status - AS

• Currently 64 Brokers live Direct Load/DRI
• Continued Broker Implementations planned for 2nd
  half year 2007, all LMBC members scheduled for go
  live by end of 2007
• 20,000 PANs submitted to 31st December 2006
• 185,000 PANs (26 of daily volume) submitted to
  31st August 2007
• Planned transactions by year end 80 (volume)
• Planned brokers live by year end 100

10
Repository Implementation status AS

• Phase 2 Completed - MAT June 07 Live 26th
  August 07
• Reinstatement Premiums/simultaneous settlements
  (single UMRs)
• Enable Urgent transaction/re-submission
  processing (PPWs etc)
• Store all Metadata
• New XIS Gateway

11
Repository Implementation status AS

• Phase 3 Planned MAT Sept 07 Live mid November
  2007
• User defined ACLs (Access Control Lists) now
  deferred to 1st Qtr 2008
• Short-termsolution (work around)
• Simultaneous settlements (multiple UMRs)
• Edit work package
• Ability to store LPANs and other docs as simple
  non-ACORD data
• Proportional Treaty Statements (ie multiple UMRs)
• Additional DRI functionality for search and
  download

12
Insurers Market Repository

• Electronic Claims File (ECF) Update

13
Insurers Market Repository ECF Cont

• Improve service to all clients (re)assureds,
  cover-holders, brokers etc
• Enhance London market reputation speedier claim
  service - reduce Claim lifecycle
• Concurrent, 24/7 access to claim files allows
  all parties to focus on complex
• Significant cost savings paper, time, space

14
Insurers Market Repository ECF Cont

• Lloyds ECF live set 2006 allows all in
  scope claims to be agreed electronically
• All Managing Agents signed and using Repository
  (IMR)
• Companies commenced Pilot June 2006 7(8) IUA
  Carriers
• Global Aerospace, Liberty, Markel, Munich Re,
  Swiss Re, XL Re, Zurich
• (AIG) in house trial ahead of IUA Pilot

15
Insurers Market Repository ECF Cont

• Company Pilot extended for 6 months in December
  2006 to
• Allow more volume
• (only) 500 new loss advices (Companies) by
  December 06
• Allow additional participants to trial
• AXA, Axis, Endurance, QBE, SCOR, Transatlantic Re

16
Insurers Market Repository ECF Cont

• Where are we now?
• 3 Companies live
• 10 Companies in Implementation process
• 12 Companies having demonstrations/in start up
  mode
• All Managing Agents Live
• 30 Brokers using ECF
• Weekly 47 of in scope claims processed via ECF
  within Lloyds (as _at_ 7th September).
• 4 week rolling average 43
• 10,000 new notifications processed 2007
  average 500 per week

17
Insurers Market Repository ECF Cont

• Evaluation by Companies completed (by original
  piloteers)
• System performance
• Xchanging service support
• System functionality
• Business efficiency impact
• System Process and Procedures manual (completed)
• Service Contract almost agreed
• Charges/charging mechanism agreed and
  communicated to the market

18
Insurers Market Repository ECF Cont

• Company Evaluation results
• Processing requirements met
• Acceptable workarounds for functional shortfalls
• Easy to use
• Demonstrable efficiency gains for both lead and
  follow positions
• Issues for resolution
• Functionality shortfalls (change requests MAT
  October 2007 live November 2007)
• Contractual items to be agreed (inc. repository
  rules inadvertant disclosure)

19
Insurers Market Repository ECF Cont

• System Functionality
• Lloyds assurance on document management
• Change requests being delivered Oct 2007
• Contract
• Current Pilot contract for an interim period
• Mutual market recognition on inadvertent
  disclosure
• Charges (Companies)
• Licence Fees (350 per licence)
• Start up fee 7500 (15000 for 2008)
• Transaction (2008) charges to cover
• IUA contribution to IMR development
• Prospective operational costs
• Enhancement fund (h/ware and functionality)

20
Next Steps

• System Functionality
• Cross market user group to identify
  prioritise further enhancements for Release 7
  expected delivery 2nd Qtr 2008
• Contract
• Urgent resolution of contractual issues
• Promote take up amongst IUA members and Brokers -
  essential for overall market take up
• Ambitious 2007 target (Lloyds - 100 all new
  advices by year end)

21

• Any questions?