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1 Market Reform Forum Update on business reform 14 December 2004 Andy Brookes Lloyds BPR.

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Presentation on theme: "1 Market Reform Forum Update on business reform 14 December 2004 Andy Brookes Lloyds BPR."— Presentation transcript:

1 1 Market Reform Forum Update on business reform 14 December 2004 Andy Brookes Lloyds BPR

2 2 Objective: up to speed in half hour…… Accounting and Settlement – coming next Electronic Claims Files Contract Certainty and Documentation LMP slips Kinnect Review of 2004; high level plans for 2005

3 3 Principles underpinning reform Reduce Londonisms: international firms must buy-in – governance role Change requires authority and a degree of neutrality: individual firms cannot do it alone; Lloyds and the Associations will lead Commitment to co-operate essential, on design and implementation Network effects: a convoy for implementation Cost / benefit case is rarely convincing on its own. FSA – the smouldering platform. Transparency – the (now) burning platform Minimum requirements; dont over satisfy

4 4 Overall approach to market reform Drive standards for data and harmonisation of process LMP slip; A&S; claims management; ACORD work; contract certainty initiatives Build supporting electronic infrastructure, throughout the life cycle of a contract A&S; electronic infrastructure for claims (CLASS, ECF); Kinnect Result: transparency in processes and performance. Then market firms and trading partners can measure and manage LMP slips, policy production, A&S take-up, claims processing

5 5 Electronic Claims File XIS development work XIS started repository enhancements work 1 st Oct (£1.6mn development and implementation costs) Contract schedule for CLASS for Lloyds going to managing agents for signature (total spend £600k) XIS started enhancements on CLASS for Lloyds 1 st Nov Governance – not simple, but should work Claims project board set up; working with LMA Systems Delivery Group Market associations – LMA, LMBC, IUA - groups in place Line of business practioner groups Working on the implementation timetable XIS phased delivery of repository functionality -Categorisation (Q1); search capabilities (Q2) -DRI in July 2005 Which firms for which lines of business?

6 6 Contract Certainty and Documentation 4 Process options identified by the CCSG -XIS involved earlier/quicker is the focus Potential initial implementation areas identified by LMBC documentation overview committee (DOC) and CCSG – 300 risks starting Q1 2005, include old way to assess impact. Planning underway. Implementation guide on LMP web site Performance monitoring group has made initial proposals regarding measurement for London Market Standards Committee Policy checking by XIS: needs to be explicit and earlier Lloyds and XIS codifying the checks; rationalise; publish performance data. Binders first – early data indicates high rejection rate

7 7 LMP Slips November BSA headline (sneak preview): 88% -Formatting hit 95% (contract certainty, process efficiency) -Up for firms that the team has seen Likely to continue to check 25% of Lloyds slips in 2005 Persistent underperformance LMP slip a year on – minor changes to update Implementation guide -in discussion with LMBC prior to publication Thematic work -Claims parties –Problem area claims agreement party: not Lloyds UMR on Panel 1 -Period (include time zones) -Law and Jurisdiction: still a problem area LMP slips for binders -Check list in production; publication shortly

8 8 Purpose of measurement Trustworthy data (vs. Ive heard it takes…..) To drive process improvements Provoke firms to improve performance – measurable targets where possible Measure impact of reform agenda Dimensions Timing; Quality; Cost; Satisfaction – customer service survey Sequence of delivery LMP Slips – more of the same Document production; XIS policy checking; start with binders Use of A&S and Claims electronic infrastructure Overseen by the London Market Standards Committee Measuring reform

9 9 Kinnect November 1 release -Went well – enhanced placement process: harmonised business process; rough edges smoothed; market acceptable Next major release 6.1 April 2005 – complete slip preparation etc Hiscox signed-up; live January (not December) Working on endorsements -Principles agreed; design end-January -Q2 delivery was aim – now September (or slightly earlier) User adoption is key: Kinnect as core process -Step by step adoption plan agreed through H1 Additional risk classes H2 (poss late H1) 2005: terrorism; international property Tiner (FSA) speech on contract certainty – core objective for market place over next two years -Kinnect is a version comparison tool; wordings assembly; collaboration tool for XIS checking

10 10 What did we get done (and not done) in 2004? LMP Slips and GUA Done Failed to do (so far) Compliance 88 % - heading for 95%? Audit Team sampling 25% - working well Binders for 01/01/2005 – just Initial ACORD standard – but late New liability schedule (marine) for use with GUA LMP template for Lineslips ACORD standard for all classes Contract Certainty and Documentation Contract Certainty report issued and market wide Steering Group formed R/I and Marine reports done User Guide on website Lloyds and XIS codifying policy checking Put in place concrete changes to improve contract certainty and policy production Accounting and Settlement Detailed design progressed well after initial delay – published December Funding nearly finalised – on critical path? Implementation timetable – MRIB aiming for end year Start build, first A&S deliverable Claims ACORD interoperability standards - vital XIS agreement (for infrastructure improvements) - painfully slow Small number of ECF pilots in progress Common London standard (LMP claims vision) Italics = not planned, but significant

11 11 Market reform objectives for Compliance checking – push for 100% accuracy (Q4) Implement LMP standard for Binding Authorities (Q1) and Lineslips (Q2) Define more of the content of LMP slip (on-going); put this into ACORD data dictionary (Q2); sponsor incorporation of LMP slip within ACORD placement message (Q3/Q4) Further standardisation of the placing process for endorsements Fully claused slip used for several lines of business (initially 300 risks; Q1-Q2) Policy production; codify XIS policy checking (binders, Q1; other, Q2); publish statistics on checking process(Q2); track and reduce error rates (H2) Agree approach to Legacy wordings (Q2) MRIB to set out timetable for phased implementation (At minimum) new procedure for premium (Q4?) Complete phased roll-out through 2006 Implement Electronic Claims File (repository) – (Q1 2006) Implement CLASS at Lloyds – (final deliverable Q1 2006) Drive implementation by lines of business; 10% electronic (Q4) Explain plan for common claims procedure in London (Q4) Agree formal training programme with CII (Q2) Measure use of new infrastructure and (hence) business benefits (on-going) Ramp up communication (on-going) LMP Slips Contract Certainty and Insurance Documentation Accounting & Settlement Claims Other

12 12 Market Reform Forum Update on business reform 14 December 2004 Andy Brookes Lloyds BPR

13 13 What you need to do Different projects, different action required Get information, get it to right place Whos doing what: clarify responsibilities Who is signing to pay for A&S? Who is digesting A&S design (IT and business)? Next years plans, budgets, IT programme Your suppliers Who is responsible for the change programme? What needs to change? (IT, processes) = coherence; getting the benefits Training

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