Electronic Claim File Briefing Development and Implementation update 1st November 2005

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Electronic Claim File BriefingDevelopment and
Implementation update1st November 2005

• Follow up to last update and demonstration on 1st
  March 2005

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Agenda

• Introduction and Welcome John O'Neill
• Status review Ian Mallery
• Market reform context Mike Smith
• Binders work in progress Rich Woodhams
• Brokers view Trevor Maddison
• LMA SDG Martin Dyer
• Next Steps Ian Mallery
• Questions and close John ONeill

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Status Review
Ian Mallery ECPG Marlborough
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LMA ECF Objective

• To replicate todays file electronically
• Not a Blue Sky Claims System development
• Based on Existing Products
• Changes to CLASS out of scope (except look and
  feel)
• Work with underlying software capabilities
• Provide a base product on day 1
• To be evolved once experience gained
• Post implementation of base product
• Strategic Review of On-going development
• e.g. Third Party Access

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Status todayKey Enhancements in 5 Phases

• Phase 1 See all documents in one view Completed
  February
• Phase 2 Leader control of file/Improved searching
  Completed April
• Phase 3 ACORD DRI Completed October
• Phases 4/5 CLASS _at_ Lloyds data through
  GUI/Seamless link
• Merged into single phase
• Detailed specification completed
• Re-planned, including key change requests
  completed
• MAT expected to start Mid-May 2006

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Design Sign Off June 2005

• Sign off pack
• ECF High Level Rules
• ECF 13 Jan 2005 Business Process Description
• ECF 17 Jan 2005 Full Requirements Definition
• ECF Business Process Models (A and B)
• ECF Phase 4/5 Full Business Design
• ECF Screen Flow
• ECF Screens Search List Summary
• ECF Screens Enquiry
• ECF Screens Actions
• DRI Diagram

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Business Operability Issues

• Two way interoperability to ACORD DRI standards
• Solution in hand
• Big Issue - driven by the CLASS responses
• Need to ensure Concurrent Access
• Ensure timely reserving
• Solutions available
• Mapping of response to distinguish agreement from
  noting
• Notification message to agreement parties to
  ensure SCM
• Also available to followers
• Followers list added to CLASS
• Needs a change in broker practice for settlements
  with changes in incurred
• Provide incurred change separately from
  settlement request (currently under discussion
  with brokers)

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Features

• Broker submits claim electronically
• Enables parallel presentation to insurers
• Reduces data transcription errors
• Allow brokers to concentrate on complex claims
• Improved insurer access to information
• Its the insurers file
• concurrent access to all subscribing insurers
• always available

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Market Reform Perspective
Mike Smith Market Reform Programme Office
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London Market Objectives

• To implement the electronic infrastructurefor
  the London market to negotiate, settle, and
  record claims quickly and efficientlyand to
  achieve a critical mass of live usage.

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Electronic Claim Files

• Enable parallel presentation to insurers
• Reduce overall transaction time
• Improve transparency of process
• Underwriters can control their own work load
• Allow brokers to concentrate on those claims
  where value is added
• Claim file always available to insurers
• Fundamental pre-cursor to the LMP objective of
  streamlined claims agreement

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Governance 1

• Directed by MRG - Brokers, Companies, Lloyds
• through Claims Infrastructure Project Board
• Programme Office Owns
• implementation timetable
• issue definition and resolution
• Market associations claims groups
• to resolve market wide claims practice issues.

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Governance 2

• LMA
• Managing Agents manage contractual delivery to
  them from XIS
• Claims practitioners define processes and
  functions
• IUA
• Formed a group to review function
• Discussing charging mechanisms
• LMBC
• BEFIT meets to review impact on brokers

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Overall Scope

• Delivers an interactive Insurers Market
  Repository to carriers
• Interactive service available to brokers
• At a price
• Adopts ACORD standards for the transfer of
  electronic documents
• To/From brokers repositories
• At no charge to brokers
• To/From carriers repositories

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Systems Processes and Procedures Manual

• Documenting how the market process works
• NOT how to manage a claim
• but where the systems fit and how to use them
• Starting with Lloyds
• working draft prepared by LMA ECPG
• under review with ECPG and BEFIT
• being extended to include IUA

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Implementation

• Broker-driven
• with Lloyds and IUA carriers and XCS
• by classes of business and risks
• programme office monitoring progress
• New claims and their subsequent transactions
• Using todays CLASS and repository
• in parallel with the enhancements
• early experience of electronic work
• assess impact on procedures and processes

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Take Up Volumes 26th October 2005
429 Advices Of which 291 New Advices
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Take Up Participants

• Brokers
• Benfield
• Cooper Gay
• Guy Carpenter
• Marsh
• Millers
• Willis (in progress)
• Aon (waiting for DRI)

• Carriers
• Aegis Amlin
• Chaucer Faraday
• Hiscox Kiln
• Limit MAP
• St Paul Travelers
• Aspen Re
• Markel

Class of Business Marine Hull Aviation
Direct Reinsurance PI Non Marine Property Binding
Authorities
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Carriers Wanting to Participate

• Ace
• Advent
• Atrium
• Brit
• Liberty

• AIG
• Allianz
• Beazley
• Global Aerospace
• Wellington

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Public Commitment to participate

• Brokers
• committed to deliver new claims to Lloyds
  electronically
• Aon
• Benfield
• JLT
• Marsh

• Managing Agents
• committed to deal electronically with new claims
• Amlin Brit
• Faraday Hiscox
• Limit Marlborough
• St Paul Travelers
• SVB Wellington

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Binding Authorities
Richard Woodhams Faraday
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Binders ECF

• Numerous advantages for handling binder claims
  via ECF
• However some significant technical issues not
  applicable to open market claims
• Solutions can be considered work-arounds pro
  tem, pending a tactical longer term solution
• Aim of this series of slides is to introduce you
  to those issues

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Binders ECF

• Binder characteristics
• Significant level of Lloyds premium income is
  due to binders
• Bordereau of losses, reported monthly
• Volume (if only the bordereau themselves)
• Opportunities to manage workflow
• Individual losses (above coverholder/ TPAs
  handling authority) all of which may need to be
  cross referenced with the bordereau

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Desktop access, plus linking claims
Block UCR
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Binders ECF

• Additional benefit (in some instances) to enable
  data entry to be pushed to nearer the source of
  origin
• TPA
• Coverholder
• Interaction with experts own repository

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Binders ECF
Broker
C/Holder
Leader
Leader
Insured
CLASS
TPA
XCS
XCS
Repository
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Binders ECF

• Additional benefit (in some instances) to enable
  data entry to be pushed to nearer the source of
  origin
• TPA
• Coverholder
• Interaction with experts own repository
• Enables timely CAF (plus Minimum Standards
  generally) on the sizeable volume of claims
  generated under binders
• Enables tracking of the claim agreement process
• Plus, reduces a significant volume of paper

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Issues

• Early implementers
• Millers, Hiscox XCS
• Marsh, St Paul Travelers XCS
• Binder Group (as a sub set of the ECPG)
• Initially to identify the potential binder
  process(es)
• Latterly, to understand and document the issues
  arising

Set the scene
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Key Issue 1 Duplication
Increased volumes of transactions, on above
authority (but below /100k) claims
Potential for duplication of reserves both on
block UCR and within individual UCRs
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The repositoryCLASS model
Key Issue 2. Data Levels
UMR

• A valid CLASS entry creates one UCR page (and a
  UMR page, if first advice) on the repository, for
  the lodging of claims and coverage info,
  respectively

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The repositoryCLASS model
Policy
UMR
Claim
TR4
TR2
TR3
TR1
Transaction
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The binder on ECF model
Key Issue 2. Data Levels
Binder Slip held at UMR level
UMR
Certificate
Certificate
Certificate
Policy coverage info, for each declaration will
need to be stored also at claim (UCR) level
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Key Issue 2. Data Levels

• eg. CLASS holds only one cover period, yet for
  binders we have
• A binder period and
• A certificate period
• Plus certain financial limit fields
• Finally, certain name fields

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Key Issue 3. Block Splits

• Regulatory Block Splits
• XCS use a multi block facility within their
  system
• automatically links constituent parts of a block
  collection over the various regulatory State
  splits
• 1) Repository works at the UMR/ UCR level for
  each claim arising under a policy
• 2) XCS system works at a UCR/ Claims Office
  Reference (and then, later, at TR) level
• Which in turn, creates a need for further
  work-arounds, pro tem.

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Next Steps

• Discover and understand the issues
• Merit of early implementations
• Consider both
• Short term workarounds to enable early
  implementation and increase volumes
• Work to develop and introduce longer term
  strategic solutions

• Contact Claire Bulman
• Lloyds Business Process Reform
• Lloyds Ext 6513
• Claire.Bulman_at_lloyds.com

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Working Party

• Murray Edwards Steve Spicer Miller,
• Charles Lee Cooper Gay
• Ian Mack, Graham Avery John Clouston, Claytons
• Martin Chapman, Guest Krieger
• David Bartington, Marsh,
• Paul Spicer, Benfields
• Paul Bastien, XCS

• Paul Farrelly, Amlin
• Richard Foulger, Aegis
• Laura Bramble James Side, Hiscox
• Heather OSullivan, Ace
• James Roberts Dave Southgate, Beazley
• Lucy Cooper Neil Riddington, Atrium
• Rich Woodhams, Faraday
• Ray Tytler, St Paul Travelers

Claire.Bulman_at_lloyds.com Lloyds Ext 6513
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A Brokers View
Trevor Maddison BEFIT Marsh
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A Brokers View

• Target
• 9 months until e-claims becomes reality
• Brokers committed to e-claims trading from 3rd
  Qtr 06
• 4 brokers publicly declared their commitment

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Highlights

• Valuable lessons learnt from early implementers
• 22 ECF partnerships created 6 brokers/16
  underwriters
• 429 accumulative volumes transacted
  electronically to date
• BEFIT and ECPG working closely with MRPO to
  ensure success of project
• Broker questionnaire to be released to 169
  brokers to understand broker readiness

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Concerns

• Process issues arising from early implementations
• The ability of brokers and underwriters to adapt
  to change
• Will there be sufficient number of brokers and
  underwriters trained and ready to go live
• Big bang vs controlled introduction (new claims)
• Handling legacy claims
• IUA and Lloyds should work in partnership to
  realise electronic completeness for London market

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Milestones

• The infrastructure is being proved
• Electronic claims is working!
• Lets stop walking paper around this market

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Impact on Budget
Martin Dyer LMA SDG St Paul Travelers
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Impact on Budget

• SDG responsible for delivery of CLASS / ECF on
  behalf of Project fund providers (LMA Members)
• Tracks XIS performance against plans / budgets
• Manages changes to scope through Change Request
  Process
• Ensures Managing Agents are appropriately
  involved / informed
• Participates in Market Claims Infrastructure
  Project Board

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Impact on Budget

• Funding provided via surcharges applied to SCM /
  USM messages
• Revenue and Development costs (pre Phase 4/5
  signoff) have been tracking to plan
• Annual operational costs significantly under plan
  (est. 0.8m)
• Q3 review with XIS of Phase 4/5 scope and Change
  Requests
• Agreement now reached with XIS
• Phase 5 scope finalised
• Additional Change Requests included (some
  excluded!)
• Budget fixed for this scope (surcharges to
  continue as planned with no changes)
• Delivery to MAT in May 2006
• Minimum scope change and focus on delivery now is
  critical

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Next Steps
Ian Mallery ECPG Marlborough
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Next Steps

• Phase 5 delivery to MAT mid-May 2006
• Delivers first version
• of an integrated electronic claims service for
  Lloyds
• replicating existing file electronically
• with improvements where possible
• companies and syndicates can see the same claim
• Things change and we wont have thought of
  everything
• There will be more issues and enhancements

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Access

• Can you access the internet from your desktop?
• Are you familiar with looking at messages, data
  and information?
• On your Personal drives or My Documents?
• On Shared or Network Drives?
• On websites?
• The Insurers Market Repository is just another
  folder of documents
• but market wide
• 24/7 access from anywhere
• Home, overseas, or even in the office
• controlled by CLASS security access

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What should you do now?

• Assess and plan for the impact on you
• How many adjusters have you got?
• How many will need access to this system?
• Can you connect to these new services?
• Who will be responsible for implementing in your
  agency?
• How will you ensure they are trained in CLASS and
  the repository?
• How many need general computer training?
• What is your approach to reviewing claims
  information if you are a follower?
• How will the leaders role change with
  responsibility for controlling the file?

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Technology Requirements

• PC specification
• Windows 2000 SP1 and higher, Windows XP
• Microsoft Java Virtual Machine Version 5.0.3802
  or higher
• Pentium 2 750 MHz and higher, 256 MB RAM, 25 MB
  of free space
• TCP/IP Networking Protocol
• Internet Explorer Version 5.5 SP2 or higher
• Java VM Microsoft JVM 5.0.3802 or higher
• Sun JVM Plug-in 1.3.1_07, 1.3.1_08 or 1.4.2
• Internet connection
• companies decide on the appropriate connectivity
  depending on their own requirements
• Variables include number of users, number of
  clients, size of files, time taken for review of
  files
• Software packages supported

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Other Electronic Initiatives

• ECPG Terms of Reference
• expanded to be the reference group for the
  impact of other projects on claims practitioners
• Claims Minimum Standards
• CAF/Claims Tracker
• Lloyds Claims Scheme rewrite
• Solution for Binders
• SCM changes
• Leader reserves
• Accounting Settlement

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Contacts

• For information
• Mike Smith MRPO Lloyds
• Ian Mallery ECPG Marlborough
• Tim Willcock LMA
• John Ticehurst XIS
• Trevor Maddison BEFIT Marsh
• Martin Dyer SDG St Paul Travelers
• To participate in implementations
• E-mail claims_at_lmp-office.com

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Questions and Close