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1 Market Reform Forum Update on business reform 31 March 2005 James Willison LMP.

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Presentation on theme: "1 Market Reform Forum Update on business reform 31 March 2005 James Willison LMP."— Presentation transcript:

1 1 Market Reform Forum Update on business reform 31 March 2005 James Willison LMP

2 2 Objective: up to speed in half an hour…… Aims and Principles Electronic infrastructure Accounting and Settlement Electronic Claims Files Contract Certainty LMP slips Documentation, early implementations

3 3 The aims of market reform Contract Certainty Clarity of contract, leading to certainty of coverage, fewer disputes, less time wasted, a reduction in legal bills and improvements in downstream processing. Service to the client Process Efficiency Efficient capturing, storing and reuse of data, reduced error rates, and quicker premium payment processes. Lower costs. To adopt processes that speed up the agreement of the contracts, the issuance of documentation and the subsequent agreement of claims. Global standards To facilitate adherence to (or creation of) accepted internationally standards for accounting, message/business flows, and technology.

4 4 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 Transparency

5 5 Accounting & Settlement Detailed business design published in December Live issues Xchanging costs (£10.4mn) being reviewed Technical and data information: Nearing Completion Accounting splits: Nearing Resolution Migration (legacy and crossover): complete for premium, claims Testing – first convoy on behalf of market; subsequent convoys MRIB and Project Board working on implementation timetable -Had aimed to publish in Q1, will be Q2 - greater certainty required on costs -Sequence and timetable for deliveries -Convoy one membership Commercial framework

6 6 Electronic Claims File XIS development work Phase 1 - Operational in February Phase 2 - Delivered, MAT till 08/04/05 Overall business process requirements - Agreed Overall business process spec being reviewed (target 22/04/05) DRI design underway Implementation 4 Partnerships operational 25 potential partnerships identified Governance Claims project board -Target of 10% of new Lloyds claims by end 2005 -Named brokers commit to deliver100% new claims from Q3 2006 -Named Managing Agents commit to use ECF for new claims from Q3 2006 Programme office Supporting control structures – risk and issue logs Monitoring implementation partnerships

7 7 Contract certainty: overview Governance Market Reform Group (MRG) with new members Market Reform Group executive (= Project Board) BPR/LMP drive – plan to MRG by April LMP slips – compliance and development Policy checking by Xchanging - publish checks, drive compliance Binders – model wordings Slip fully claused XIS checks and data – top five reasons Contract Certainty Implementation Group Get wordings agreed during bind Get checking done during bind

8 8 Contract certainty: LMP Slips February BSA headline 91% Continue to check 25% of Lloyds slips in 2005; and IUA company slips LMP slip a year on – publish once agreed, April League tables will be published from April LMP slips for binders (Lineslips to follow) -Checked 30 in February; BSA 93% compliance -Still high XIS rejection rate – although premiums and claims can now flow ACORD GPD published -Marine and reinsurance sub group formed and meetings held

9 9 Contract certainty: Documentation Contract Certainty initial implementation underway These will initially involve 8 brokers, approximately 15 insurers of 300 risks in Q1-Q2 2005 across 8 classes Financial Institutions, Directors and Officer Liability, Treaty Reinsurance (Marine and Non-Marine), Marine, Professional Indemnity, Aviation, Property Facultative Reinsurance Associated Implementation guide and Policy guidelines published on LMP Website Performance monitoring (of timelines and quality) is to be done at the same time The intention is to learn lessons and to rapidly move to wider rollouts

10 10 Contract Certainty: Documentation A draft rollout plan, showing how it is intended to increase volumes during 2005-6, is shortly to be reviewed by the MRG This will then be developed to agree targets with individual organisations. Work continues between Lloyds/XIS to review and codify the policy checks performed Paper regarding approach t o be taken to legacy policies shortly to be reviewed by MRG

11 11 Communication Newsletter FAQ Market Reform Forum Monthly update Specialist sessions Websites LMP, market associations Press

12 12 Market Reform Forum Update on business reform 31 March 2005 James Willison LMP

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