Electronic Claims Trading is Simple Electronic transfer of data and documents, broker desktop to underwriter desktop. Claims workflow managed from the desktop electronically. Removal of the paper claim file. Simple claims – straight through processing, no broker involvement. Claims advocacy – broking where it matters. Delivery of a quality client and underwriter service.
ECF – Key Messages Market reform is no longer a set of words. This project is real, ECF is real. In one weeks time the potential to trade new claims electronically with Lloyds syndicates (day 1 in-scope) will become a reality. The IUA are catching up fast, pilots have commenced and the commitment is there – we expect them to be live mid 2007. Reform of the claims process is happening, ECF is the catalyst to a modern market place. The London market is changing, market reform and electronic trading will work this time. Are you preparing for change?
Key criteria for ECF success Full commitment of all syndicates to trade claims electronically. Full commitment of IUA carriers to trade claims electronically. Full commitment of brokers to move to electronic claims trading within a reasonable timeframe. All new claims received in the 4th Qtr 2007 traded electronically, all brokers, all underwriters. Underwriters are making a commitment, brokers need to respond. There will be issues, this is not Big Bang brokers need to work in partnership with Underwriters to make ECF a London market success.
Market Reform Page 8 ECF: Key part of the London process reform programme Overall aim: –A framework of standards for business processes that enables firms to deliver services efficiently to customers at a cost and level of risk comparable with other platforms Note: –Any costs inherent in a subscription market must be offset to deliver this comparability. –Any changes in business process must be managed in such a way as to avoid undermining the unique qualities/competitive advantages of the London Market.
Market Reform Page 9 ECF is not happening in isolation Claims beyond ECF –Change requests – no system stays put –Claims infrastructure to include IUA –Protocols (LMP2001); Lloyds Claims Scheme –Support Claims Strategy & Minimum Standards Integration with other reform workstreams –Accounting & Settlement –Repository use; DRI standards; P2P strategy and claims –Contract Certainty –Roles and responsibilities clearly defined –Repositories……..again
Market Reform Page 10 Implementation approach Lead implementers Prepare to follow –Commercial –Lloyds performance standards –Regulatory Sponsors; project managers
Market Reform Page 11 E.C.F. Underwriter Viewpoint Carl Phillips Amlin & LMA Systems Delivery Group
Market Reform Page 12 Why Do Underwriters Need A Claim File? Good Business Practice - Easy way of supporting / evidencing decisions Justify Reserves and Payments to Shareholders FSA Requirements Lloyds Claims Management Principles and Minimum Standards Claims Agreement for Followers (CAF) - Consistency of information Goshawk / Tysers
Market Reform Page 13 Why An Electronic Claim File (E.C.F.)? Concurrent/Contemporaneous Access Transparent and Auditable Process Improve service levels to customers Removal of dead time (transporting files) Worldwide access to the file 24/7 Data Integrity and Backup Collaborative Agreement - Lloyds Claims Scheme/ Claims Agreement for Followers The Technology Exists - in everyday use by all London Market Practitioners Storage and filing requirements
Market Reform Page 14 LMA ECF Objective To replicate todays file electronically –Not a Blue Sky Claims System development Based on existing products –No changes to CLASS at this stage –Seamless access to CLASS information and documents through an Integrated Repository using Windows Provide a base product in September 06 –To be evolved once experience gained Post implementation of base product –Strategic review of on-going development –e.g. Third Party Access / Leader Reserves/Web Services etc.
Market Reform Page 15 Features Broker submits claim electronically –Enables parallel presentation to insurers –Reduces data transcription errors –Allow brokers to concentrate on complex claims –Facilitates improvements in claims settlement time –Improves Customer Service Improved insurer access to information –Its the insurers file –Concurrent access to all subscribing insurers –24/7 access, worldwide
Market Reform Page 17 Status today Key Enhancements in 5 Phases Phase 1 - See all documents in one view Phase 2 - Leader control of file/improved searching Phase 3 - ACORD DRI (receipt of documents) Completed 2005 Phases 4/5 – Merged into a single phase - CLASS @ Lloyds data through GUI, full DRI and Seamless link with documents in repository On target for September Roll out Go/No Go Decision 7 Sept
Market Reform Page 18 Systems Processes & Procedures Systems Processes and Procedures Guide –Broker & Underwriter Collaborative Approach –High-level guide –NOT a systems user manual or adjusting manual –Focuses on process Workshops have been convened to review generic process and class of business variations –Confirmed generic process –Confirmed little variation by class of business –Many Issues identified and documented for resolution.
Market Reform Page 19 Types of claim The majority of all new claims can be processed via ECF. However there are certain circumstances that ECF has not been required to support and some other instances where system change or further definition of market processes is required to enable full support. Business or Claims types that ECF has never been required to support –Claims on unsigned risks –General Average –Proportional treaties –Scheme Canada –Direct Livestock –Claims Payable Abroad –Letters of credit, loss reserves and Outstanding Cash Advance (OCAs) –Bulk Settlements Business or Claims types excluded from the current implementation of ECF Solution is currently being developed –Delegated Lead to XCS (other than 100% Delegation, which is in scope) –Binding Authorities, Cover Collections and other Bordereaux Claims Require further analysis –Political Risk –Aviation verticals –Certain Multiple OSND claims –Third Party Access to ECF –Existing paper claims files
Market Reform Page 20 Next Steps GO LIVE – September 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 –BUT a step-change for the London Market There will be more issues and enhancements –Legacy claims –Issues recorded and initial plan for resolution Things change and we wont have thought of everything
Market Reform Page 21 ECF is here and were ready MAT approaching completion Staff training underway 16 Managing Agents participating from next month –Representing about 60% of Lloyds Market Capacity 5 Brokers submitting ECFs next month –Representing about 40% of Lloyds Market Capacity –There wont be a paper file! Increasing commitment every week A Partnership Approach that Benefits all - But not least the Policy Holder.
Amlins Approach Experience and extracting maximum benefit Have built experience in ECF through 7 pilots across 7 classes of business with 7 brokers over 2 years All claims teams have been engaged in ECF, some since April 2004; claims handlers now looking forward to going live with Electronic Claims. Implemented new repository workflow system specifically to handle all claims electronically It works!
Amlins Approach Preparedness Amlin have begun internal training in preparation for live date. Little change for those that have used CLASS before Amlin confident that 80% of their new claims can be handled through ECF now without impediment. There will be pain to get the gain!
Roles & Responsibilities of ECF Parties Lead Lloyds Underwriter BrokerXCS Role Responsibilities Agent of the (Re)Insured Collate and present claims data / information to Insurers - will include first and subsequent claim advices Collection of claim monies on behalf of (Re)Insured Review claims information provided by broker and other parties Represent the interest of Leading Lloyds Syndicate in any claims handling decisions, including coverage, recovery, litigation etc Review claims information provided by broker and other parties Represent the interest of Following Lloyds Syndicates (if CAF or Peer Review, will include claims handling decisions including coverage, recovery, litigation) Advise claim details to Lloyds Syndicates and process claims, recoveries and/or fees via Lloyds Market claims system Create / update claims data in CLASS @ Lloyds in a timely fashion. Will include:- –Claims –Refunds –Fees, if included in indemnity amount (optional for brokers if not)) Upload correct supporting claims documentation onto Market Repository. Will include (but not limited to):- –Slip with OSND and policy, if available and all relevant endorsements (including AP/RP and Non Premium) –Cover Note / Certificate / Declaration, where applicable –Preliminary and subsequent loss details –Expert reports –Release Form / Proof of Loss –Correspondence from (Re)Insured –Supporting claim documents (e.g. bordereau, shipping documents, invoices receipts, etc) Convey instructions to experts on behalf of Insurers Calculate claim adjustments, including application of any applicable deductibles, orders, reinstatements - where applicable etc Arrange payment of claim funds to (Re)Insured on behalf of Lloyds syndicates Arrange payment of experts fees on behalf of Lloyds syndicates, if included in indemnity amount (or broker elects to collect fees if not) Confirm broker has uploaded correct claim documents and review same. Will include:- –Slip with OSND and policy, if available and all relevant endorsements (including AP/RP and Non Premium) –Cover Note / Certificate / Declaration, where applicable –Expert reports, invoices, receipts, shipping documents etc Check coverage details and confirm:- –Certificate / Insured / interest / declaration attaches to policy and sum insured –DOL / DCM falls within policy / certificate period –Claim falls within available policy / certificate limits –Applicable coverage type –Deductible / excess / franchise correctly applied –Loss location Review and assess claim documentation. Will include (but not limited to):- –Identity of Insured / Coverholder / Cedant / Reinsured –Preliminary and subsequent loss details –Expert reports –Release Form / Proof of Loss Form etc Review broker loaded financials Update Lead Underwriter comments on CLASS @ Lloyds entry Route claim to other agreement parties, as necessary Instruct and manage experts in conjunction with XCS Manage disputes with insured in conjunction with XCS. Will include:- –Arbitration hearings or court cases –Depositions etc Manage Direct Report claims files and agree any applicable Direct Settlements Determine and execute claims handling strategy in conjunction with XCS Confirm broker has uploaded correct claim documents and review same. Will include:- –Slip with OSND and policy, if available and all relevant endorsements (including AP/RP and Non Premium) –Cover Note / Certificate / Declaration, where applicable –Expert reports, invoices, receipts, shipping documents etc Check coverage details and confirm:- –Certificate / Insured / interest / declaration attaches to policy and sum insured –DOL / DCM falls within policy / certificate period –Claim falls within available policy / certificate limits –Applicable coverage type –Deductible / excess / franchise correctly applied –Loss location Review and assess claim documentation. Will include (but not limited to):- –Identity of Insured / Coverholder / Cedant / Reinsured –Preliminary and subsequent loss details –Expert reports –Release Form / Proof of Loss Form etc Review broker loaded financials Update XCS comments on CLASS @ Lloyds entry Route claim to other agreement parties, as necessary Instruct and manage experts Manage disputes with insured in conjunction with Leader. Will include:- –Arbitration hearings or court cases –Depositions etc Manage Direct Report claims files and agree and process any applicable Direct Settlements Determine and execute claims handling strategy in conjunction with Leader Provide Technical Processing or CAF service, as required Process corrections Determine and create XCS CLASS entries in line with:- –Regulatory requirements –CAT code splits –NAIC splits –Trust Fund –State Code requirements Create XCS CLASS entries and send SCM / USMs to Syndicates Offer an Enhanced Claims Review service Pursue recoveries, where appropriate
System Validation Lead Lloyds Underwriter Broker XCS Class @ Lloyds XCS CLASS Broker loads C@L Lead agrees C@L XCS agrees C@L XCS release XCS CLASS and send SCM / USM to market SCM & USMs Claims Data Mandatory Fields in C@L - 25 (Entered by Broker) - UCR (includes Original Broker) - TR (includes Payee Broker) - Bureau - LMP Indicator - First Advice Indicator - Advice to include Settlement - UMR - Broker Phone No. - Bureau Lead - Insured - Policy Period or Period Narrative - Slip Order 1 or Narrative - Loss Name - Loss Date From - Loss Details (Narrative) - Original Currency - O/S amt or O/S Qualifier - Order Settlement (if Settlement) - Settlement Currency (if Settlement) - Settlement Amount (if Settlement) - Original Signing No. & Date - Settlement Exchange Rate Optional Fields in C@L - 42 (Entered by Broker) - Broker Claim Reference 1 & 2 - Reinsured - Interest - Perils - Location / Voyage - SI Limits - Excess - Loss Location - Vessel / Aircraft - Lawyer - Adjuster - Previously Paid - VAT amount etc Editable & Updateable Fields in C@L - 5 (Data originally entered by Broker) - Risk Code - CAT Code - PCS Code - Further Agreement Parties - Cause Codes (not used at the moment) Editable & Updateable Fields in C@L - 5 (Data originally entered by Broker) - Risk Code - CAT Code - PCS Code - Further Agreement Parties - Cause Codes (not used at the moment) Non-Editable Fields in XCS CLASS - 17 (Data originally entered by Broker) - UCR - TR - Advice / Settlement - UMR - Syndicates on Risk (including Bureau Lead) - Slip Order - Original Currency - O/S Amount or O/S Qualifier - Settlement Currency - Settlement Amount - Original Broker (Calculated from UCR) - Payee Broker No. & Pseud (Calculated from TR) - Original Signing No. & Date - Settlement Exchange Rate - Broker Claim Reference 1 & 2 - Interest - VAT amount Editable Fields in XCS CLASS – 16 (Data originally entered by Broker) - Broker Phone No. - Insured - Pol / Cert Period From & To - Loss Name - Date of Loss From & To - Loss Details (Narrative) - Reinsured - Original Insured - Perils - SI Limits - SI Currency - Excess - Loss Location - Vessel / Aircraft - Lawyer - Adjuster NB. Editing these fields will cause discrepancies between C@L and SCM/USMs sent to Syndicates Additional Fields in XCS CLASS - 72 (Entered by XCS on XCS CLASS) - Presentation Date - Charge Type - Peer Review Indicator - Market Code etc Getting the data right first time
Questions & Close Trevor Maddison Marsh and BEFIT
How Do I Get Involved – What Do I Need? To submit claims electronically you must have: –Class @ Lloyds access either online or batch –The ability to load scanned claims documents to the Xchanging hosted market repository either via DRI auto load or direct load –Both Class and the ability to put documents in the repository are pre requisites to eclaims trading with underwriters