1. London Market TOM Blueprint A presentation for senior leaders

2. Purpose of this presentation
The purpose of this presentation is to enable senior leaders across the London Market (LM) to explain the following to their senior colleagues:
The drivers behind the LM Target Operating Model (TOM) programme and the Blueprint
What the programme is focusing on now and what it’s delivered to date
The business benefits and associated costs of the programme solutions
What the future looks like
This presentation, which includes a guiding script in the notes pages, can be adapted according to audience knowledge of the subject. More detailed information and materials to help with this are available on the isupportTOM website (see Appendix 6.1 for links):
Solution segment overview: what’s underway and what’s to come
Enterprise architecture: for technical teams to explain how it all fits together
Cost Benefit analysis business case: the costs and benefits of each solution
Personas: how the changes will affect different organisations and roles 
For further support, please contact your Market Association:
LIIBA: Mark Knight/James Livett
IUA: Louise Day
LMA: Tom Payne/Tim Willcock 2
LONDON MARKET TARGET OPERATING MODEL

3. LONDON MARKET TARGET OPERATING MODEL
1.0 Contents
Section
Detail
Slide #
0.0
Purpose of this document 2
1.0
Contents 3
2.0
2.1
2.2
2.3
Strategic context
London Matters
Why modernise
LM TOM Vision and Mission
4 - 6
3.0
3.1
3.2
3.3
3.4
Realising the LM TOM Vision
Delivering business benefits
In flight TOM initiatives
LM TOM Blueprint
In flight TOM initiatives: progress
7 – 16
4.0
4.1
What’s next
2017 and beyond 17
5.0
5.1
Costs and benefits
High level figures 18
6.0
6.1
6.2
Appendices
Materials available on isupportTOM website
Market Association contact details
19-21 3
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4. 2.0 Strategic context 2.1 London Matters
London Market Group
London Market Growth and Modernisation Initiatives
Building a diverse, dynamic workforce
Making London an easier place to do business
Creating a better business environment
Telling the London Market story
Developing a better understanding of where the skills shortages are and helping the market address them
Making the London Market highly accessible, efficient and relevant to the needs of our customers
Working with government, parliamentary parties and the civil service to ensure they better understand the position of the market and its place in the UK economy
Providing our buyers with a clear case for coming to London to purchase our products and services
In November 2014 the London Market Group published a report - “London Matters” – which set out the challenges to the future success of the London Market over the next decade.  From this report, four interdependent workstreams were established to make our market more attractive, responsive and competitive to clients:
•    Building a diverse, dynamic workforce
•    Making London an easier, more cost effective place to do business (LM TOM – Target Operating Model)
•    Creating a better business environment
Telling the London market story
TOM (Target Operating Model) is a core component of the Market Modernisation proposal, to improve the ease of doing business in the London Market, locally and globally. 4
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5. 2.0 Strategic context 2.2 Why the London Market needs to modernise
London is losing market share, and its position as the first choice for commercial and speciality (re)insurance is at risk
The London Market is slower to react to threats and opportunities than the competition
The London Market is not focussed enough on its customers and their needs
The cost and speed doing business in London is driving business away
A lack of standardisation make us less attractive than other markets and has made the London Market inefficient
Competition is the life blood of the market and will lead to better service, better products and more business being done in London
Feedback from across the London Market highlighted a number of critical issues and key concerns:
London is losing market share, and it’s position as the first choice for commercial and speciality (re)insurance is at risk
The cost and speed doing business in London is driving business away
The London Market is not focussed enough on it’s customers and their needs
The London Market is slower to react to threats and opportunities than the competition
A lack of standardisation make us less attractive than other markets and has made the London Market inefficient
Access to Market data which is a powerful asset could be better used for the advantage of individual participants
Competition is the life blood of the market and will lead to better service, better products and more business being done in London.
Market data is a powerful asset and access could be better used for the advantage of individual participants 5
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6. 2.0 Strategic context 2.3 Vision and Mission
London Market TOM Strategic Vision
London Market Group Vision for the London Market
“To build and maintain London's position as the global centre of commercial insurance and reinsurance excellence”.
London Market Target Operating Model Mission
“To enable the London Market to grow, we will make it highly accessible, efficiently run and relevant to the needs of our customers. We will deliver simplicity and reduce cost so that our participants can concentrate on using their expertise to deliver the value proposition that makes London so compelling.”
To address this challenge the London Market Group identified its vision for the London Market as “To build and maintain London's position as the global centre of commercial insurance and reinsurance excellence”.
In support of this, the LM TOM Steering Board agreed the mission of the London Market TOM as:
To make the market highly accessible, efficient and relevant to the needs of our customers.
To deliver simplicity and reduce the cost of doing business in London.
And most of all to help businesses across the London Market to grow and thrive, allowing firms to concentrate on using their expertise to deliver the value proposition that makes London so compelling. 6
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7. 3. 0 Realising the LM TOM Vision 3
3.0 Realising the LM TOM Vision Delivering real business benefits to organisations across the London Market
The programme is focusing on eight business imperatives to deliver the strategic vision of the London Market TOM:
Customer Focus
Making sure what we do is aligned to our customers needs…
Embracing solutions that are attractive to our customers and enhance their experience of doing business in London. Making sure that we remain relevant to their needs. 1
Enable Growth
Providing London Market participants with the infrastructure for growth…
Enabling London Market participants to focus on growth opportunities whilst we provide frictionless common services. 2
Effective Competition
Making it easier for the market to drive competition...
Ensuring that the market can compete effectively where competitive advantage can be gained and collaborate sensibly where there is none. 3
Greater Agility
Ensuring the market is able to respond to opportunities and change…
Making sure the market is able to adapt effectively to take advantage of market opportunities and innovations. 4
Ease of Access
Making it easier to do business within the London Market…
Making it easy to do business with London by supporting the need for multiple distribution channels, hours of service, language, currency and regulations. 5
Improved Efficiency
Making the market faster and more cost effective…
Making sure our processes are optimised to add value, eliminate duplication, reduce turnaround times and avoid unnecessary effort. 6
The London Market TOM is achieving this vision by applying eight business imperatives when designing and delivering the solutions
Each of these address the core issues facing the London Market today, as outlined earlier, and effectively summarise how the London Market will benefit from implementation of the LM TOM
Common Standards
Doing business in a uniform, and repeatable fashion…
Where it makes sense, applying common standards across the market, for Processes, Messages, Data and Services. 7
Better Data
Putting data at the heart of the London Market…
Ensuring we have the accurate data, managed by appropriate tools and standards, helping the market make good decisions based on meaningful insights. 8 7
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8. 3.0 Realising the LM TOM Vision 3.2 In flight LM TOM initiatives
The four priority initiatives of the London Market TOM were confirmed by the TOM Steering Board in Q1 2016
Placing Platform Ltd (PPL)
Central Services Refresh Programme (CSRP)
Delegated Authority (DA)
Data Integration (DI)
Structured Data Capture (SDC)
To successfully realise these benefits and the overall vision, the market needed a comprehensive programme that pulls together the existing projects, defines solutions to remaining problems and creates a realistic solution for our market
After consultation with the market at the end of 2015, in early February 2016, the TOM Steering Board directed the programme to focus effort on the four priority initiatives. They are:
Electronic placing platform PPL – which is all about how the risk moves through the market
Central Services Refresh Programme - CSRP – which focusses on moving the money through the system
Delegated Authority – which deals with the significant amount of coverholder business we do in this market
Data Integration and Structured Data Capture, initiatives to make sure we can move data around the system seamlessly
Running through all these is the Innovation Community – which aims to be a central point for attracting innovation to the market, to be co-ordinated in evaluation of opportunities and ultimately to adopt innovation that supports operational improvements.
Each of these initiatives has seen significant progress.
I n n o v a t i o n 8
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9. 3.0 Realising the LM TOM Vision 3.3 The LM TOM Blueprint
For the programme and for each individual initiative, the Blueprint defines:
The choice of solutions
The associated costs
What the benefits to the Market would be
The LM TOM Blueprint was reviewed by the LM TOM Steering Board 11th July 2016 and has the following core objectives:
Confirm the architecture of the overall programme
Validate the priority status of each of the current initiatives
Outline a further set of solutions which enable the market to choose what to implement and over what timeframe, allowing firms to decide how to balance expected investment against benefits.
Before covering what the initiatives have delivered to date, let’s look at the LM TOM Blueprint.
For the programme and for each individual initiative, the Blueprint defines:
The choice of solutions
The associated costs
What the benefits to the Market would be
The core objectives of the Blueprint were to:
Confirm the architecture of the overall programme
Review current initiatives to confirm their priority status is still valid
Outline a further set of solutions which give the market choices about what to implement and over what timeframe. In this way the market can decide how to balance the expected investment against benefits. 9
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10. 3.0 Realising the LM TOM Vision 3.3 The LM TOM Blueprint cont’d
Built by the Market for the Market
Developed in collaboration with the Market, following over 60 working sessions and formal briefings with 10 market leads, 100+ industry professionals and key operational committees, the LM TOM Blueprint provides:
Please note these documents will download more swiftly if accessed directly from the isupportTOM website
A detailed description of all the in flight and future initiatives, including scope, delivery approach and cost/benefit levers
TOM Solution view
Multi-layer views (architectures) across the solutions that ensure solutions link together, re-use common logic and break the total work required into manageable blocks of work.
TOM Blueprint Enterprise Architecture
An in-depth analysis of how the solutions will affect individuals and companies across the market
TOM Personas
An outline of the LM TOM business case broken down by solution, each highlighting the costs, benefits, business alignment, dependencies and market participation
TOM Cost Benefit Analysis Business Case
Developing a Blueprint is clearly one of the most important exercises for any programme
And in keeping with our core principle of ‘built by the market for the market’ this was done in close collaboration and consultation, not only with all the key market association committees, but also with over 100 market professionals 10

11. LM TOM Solutions: Placing Platform Ltd (PPL) Moving risk through the market
Risks are negotiated and placed both face to face and electronically, removing paper from the process and creating a digital information flow and audit trail
Benefits
Faster response time
Ease of access
Improved efficiency
Progress
Priorities
Single model - common standards
Better data
Workload prioritisation
Cyber and Medical Malpractice are now live on the platform as an extension of the Financial and Professional Lines class of business.
The 2017 PPL Roadmap has been agreed by the PPL Board.
4663 firm orders have been bound on the platform and 3489 endorsements have placed on the system
The Marine class of business went live on Monday 6th March
Facilities is schedule for Q2, 2017
Property, Casualty, Construction, Reinsurance and Aviation will follow when the market is ready
First, the electronic placing platform – PPL – which enables brokers and insurers to quote, negotiate and bind business digitally.
On the 11th of July, under David Ledger’s leadership, the system went live for stand alone terrorism, with nine brokers and 42 carriers on the platform, and the first risk was bound between Marsh and Chaucer in the first hour of trading.
It is important to emphasise that PPL is not there to take away what makes the market great. It is not there to detract from the face-to-face negotiation or the way our market handles its core business. It exists to streamline the bits of our work that are inefficient, and help us make the market easier and more cost-effective to do business with.

12. LM TOM Solutions: Central Services Refresh Programme (CSRP) Moving money through the system
Transaction accounting is simplified and standardised, meaning brokers can use the same systems for London as other markets
Faster payment
Improved efficiency
Common standards
An online portal, providing a simple and inexpensive way for brokers and service companies to interact with the new channel, now supports premiums submissions and is scheduled to go-live for claims in March
Plans for later in 2017 include implementation of a capability to support binders and a range of other submission types, plus a number of additional changes to enable carriers to become directly involved in the resolution of queries
Better data
Simplified and standardised broker submissions
Reduced costs
Benefits
Progress
More than 1850 messages have been submitted since the Central Services Refresh Programme launched the premiums channel
The claims channel is scheduled to go-live in March following market testing. As a result brokers will be able to process both premiums and claims in the same way they can in other global markets
Next is the initiative focused on making the money flow more easily – the central services refresh programme.
CSRP is designed to enable brokers to submit premiums and claims electronically using the same data and process standards as outside the London market. It will greatly reduce the unique and very significant administrative burden of trading in London – particularly for brokers. 
In April the programme successfully implemented the first phase of CSRP which focussed on premiums, with Aon Benfield the front runner under Peter Mungeam’s leadership.
As well as improving the speed with which payments are made, it has also increased the accuracy of information going through the system.
Premium payments are moving much faster – with 30 days being cut from the timeline (that is a reduction of a third).
More than 1850 messages have been submitted since the Central Services Refresh Programme launched the premiums channel.
Right First Time performance has improve significantly leading to faster turnaround times, faster premium payment, less re-keying and re-work.
An online portal, providing a simple and inexpenseive way for brokers and service companies to interact supports premiums submissions and is scheduled to go-live for claims in March.
There are plans to introduce a capability to support binders and a range of other submission types, along with changes to enable carriers to become directly involved in the resolution of queries, later in 2017
Priorities

13. LM TOM Solutions: Delegated Authority (DA) Making London capacity more attractive
Audit and compliance will be streamlined and standardised, and data collected only once - creating consistency and simplicity for all parties
Ease of access
Greater productivity `
Benefits
Better data quality and consistency
Common standards
Progress
1500 fewer audits will take place in 2017 because of the automated coordination of coverholder audits, covering 3150 relationships
The online audit management system was re-launched in February this year, with full functionality in place in June
The elimination of multiple audits means our coverholders can focus on writing profitable business, and providing clients with outstanding service
Priorities
To further support this commercially critical business, the Delegated Authority team is also designing new compliance services, and a central data repository which will enable coverholders to easily submit data for all the carriers they service
The third priority confirmed by the TOM Steering Board was developing Delegated Authority services.
The programme is focusing on this because delegated underwriting plays a key role in the London insurance market. Lloyd’s alone receives around 30% of its premium income through firms that hold underwriting authority on behalf of syndicates – and it is a growing area of business for the companies’ market as well.
And this trend is set to continue –many businesses across the London Market are looking to grow by branching out to new territories and new classes of business through third-party partnerships.
Delegated authority business has spent the past 50 years being something of an after-thought and is an area where many businesses have long established but not very efficient ways of dealing with their coverholders.
So TOM wants to prioritise this and help make that business work more beneficial by agreeing common processes and standards.
Last year the programme piloted Project Tomorrow – where risks quoted and bound in Australia were transferred straight into the processing bureau in London using global standard messaging. This model shows that we can reduce the possibility of human error, data loss and corruption by removing the need for rekeying and manual manipulation of data.
 Information that used to take 60 days to arrive in London is now available in a week. In addition, whereas the coverholder used to spend 9 days a month creating spreadsheet bordereau for each contract; the workload has gone down to zero, which makes London much more attractive and easier to do business with.
The next step is centralised coverholder audit and compliance services. The objective is for coverholders to have a single audit, that compliance processes are consistent and that data is collected once and shared with the relevant stakeholders.
In an environment of increased regulatory oversight, achieving this vision will be an important step forward to helping businesses mitigate and manage both the workload and the threat of regulatory action.
The TOM programme has identified a vendor to help design and build a permanent solution for centralised audits. The pilot programme undertook 1,250 co-ordinated audits covering 5,160 relationships – so far, this exercise has reduced the number of audits by nearly 2,000. This initiative will dramatically simplify the need for businesses across the market to conduct individual audits, and will mean that coverholders will not need to respond to multiple audit requests every year.

14. LM TOM Solutions: Data
Data Integration: sharing information seamlessly
Data will be defined once, used consistently and continuously improved so that LM TOM solutions can be properly integrated across the market.
Common standards
Ease of access `
Benefits
Better data quality and consistency
Greater productivity, reduced re-work and effort
Market Business Glossary and Collaboration Pilot – “The creation of a single centralised source of definitions and rules for market data.” The pilot show and tell sessions have been completed with continued positive feedback from the market.
Data Strategy – Preparation for the first Market Engagement Workshop with carrier representative’s indicated by London Market Association (LMA) and International Underwriters Association (IUA) has begun..
Progress
The TOM Board also approved an overarching work stream focused on data management.
It is a universally accepted truth that the London Market has to move away from paper, and that we have to extract data from documents in a way that makes it universally accessible.
Data is the life blood of our industry but the market had not been able to establish global data standards with our colleagues around the world, or implement governance for common data across the market.
The TOM programme will make that change, which means we need rules for a digital market so that we all speak the same language, and we need the ability to convert information so that it can seamlessly move between systems with no re-keying.
TOM has delivered a pilot project to unlock Lloyd's reference data and make it easily available across the market. Currency codes, risk codes, broker numbers and other information from the Lloyd’s market directory were delivered through a web service to Beazley so that it could be fed into their system with no rekeying.
The next step will be to make this service available to any market participant and to extend the scope to provide a one stop shop for good quality, validated, reference data for the whole London Market.
Priorities
Business glossary and collaboration capability for shared terms (1500+) and an authoritative central source of rich descriptions, their relationships, usage and rules
New/enhanced ACORD message standards based on the data and messaging requirements of the LM TOM, supporting integration across the TOM solutions
The delivery of a source of master data, and lists of reference data, shared across the London Market and made accessible through a standard Web API interface

15. LM TOM Solutions: Data
Structured data capture - essential for straight-through processing
Creates digital data to eliminate re-keying and duplication, freeing time for higher value activities
Optimised processes
Improve efficiency `
A successful structured data capture pilot has now been completed, converting information from a number of sources into a universally acceptable message
Revised delivery plan for 2017 has been signed off by the SDC Steering Board. The TOM Working Group and Steering Group have agreed that the scope of the Structured Data Capture project can be expanded to include the direct sourcing of Market Reform Contract documents from Placing Platform Limited (PPL) to provide a global placement message to subscribing customers.
Industrial delivery of the SDC service for Market Reform Contracts (MRCs) with associated capabilities to support future use
Launch of a live, cost-effective service to early adopters
Implementation of the service to other adopters in the market
Increased data accuracy
Common standards
Benefits
Progress
Structured Data Capture, is a service that converts information held in a variety of formats into structured data using a combination of software tools and manual processes. A pilot project has taken place with further beta testing to follow during 2017.
Priorities

16. Innovation Better, smarter, faster
Our research and development workstream is continuously scanning the technology horizon to identify solutions which help us to work better, smarter and faster
Benefits
Provides a mechanism for identifying ideas for continual improvement
Engenders a culture of innovation by encouraging the market to share ideas and by creating tools and processes for collaborative innovation
New ideas are triaged, prioritised and explored in a low risk, agile way
Blockchain Proofs of Concept (PoCs) completed for Claims Bordereau and Coverholder Approval
Published a study on ‘Smart Contract’ opportunities for the market
Over 600 market participants attended a series of innovation specific events focusing on Robotics, the “Internet of Things” and Data
Launched a thought leadership portal to promote sharing of news and articles on innovation
Engagement with the Young Professionals Network
Progress
Expand the roll-out of an innovation collaboration platform across the market
Scope 2017 priorities for the Innovation workstream
Priorities
The programme is aware that whilst they are working on today’s solutions, they can’t ignore developments which might affect how they work in the future.
So they created an innovation community to provide a mechanism for identifying ideas and continual improvement opportunities.
The hope is to engender an “innovation culture” by encouraging the market to share ideas and by creating tools and processes for collaborative innovation; their approach is to triage, prioritise and explore new ideas in low risk, flexible way.
The Under 35 community, an energetic, vibrant and passionate group of people, with arguably the biggest vested interest in making the TOM a success are actively engaged in this work as well as the other initiatives in the TOM.

17. 4.0 What’s next 4.1 Plans for 2017 and beyond
In 2017 and 2018 the focus will be on delivering the following:
Continued roll out of PPL
All build work on CSRP, with the focus shifting to enabling adoption across the market and eventual retirement of Lloyd's Premium Advice Notice (LPANs) in subsequent years
Delegated Authority data work to create common standards and a mechanism for efficiently transferring data from coverholders to target carriers and brokers
Rollout of Delegated Authority data services across the Coverholder network
Launch of Structured Data Capture so that one of the first steps to straight through processing is a reality.
When the market is ready, the next phase of work will focus on Claims and Insurance Tax Calculations.
The market will then be in a position to make choices about what to address in subsequent phases.
And from 2017 the programme will deliver the following:
The continued roll out of PPL.
All the build work on CSRP, with the focus shifting to enabling adoption across the market and the eventual retirement of LPANs in subsequent years.
The data element of the Delegated Authority work to create common standards and a mechanism of efficiently transferring data from coverholders to the carriers and brokers that need it.
And the launch of Structured Data Capture so that one of the first steps to straight through processing is a reality.
When the market is ready, the next phase of work will focus on Claims and insurance tax calculations.
The market will then be able to make choices about what they would like to address in subsequent phases. 17
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18. 5.0 Costs and benefits High level numbers
LM TOM considers it a commercial and ethical imperative to spend the market’s money with care
In 2015 the anticipated cost of delivering the four priority solutions was estimated at £250m
This estimate did not include PPL software costs so the revised central cost estimate is now £270m
Removing the PPL software costs brings costs under the original estimate of £250m
Benefits
Once all initiatives are fully adopted, a saving of £223m a year will be delivered, and that is for the carrier market alone
After implementation, the payback for the TOM will be over three years of full savings
The Cost Benefit Analysis Business Case Blueprint documentation available on the TOM Supports London website Blueprint pages contains detailed costs and benefits for each solution
Businesses are encouraged to review and understand the detail

19. London Market
TOM
6.0
Appendices

20. 6.0 Appendices 20 6.1 Materials available on isupportTOM website*
*Please note, these documents will download more swiftly if accessed directly from the isupportTOM website
6.1 Materials available on isupportTOM website*
More detailed information and materials to further supplement this presentation and other senior level discussions are available on the isupportTOM website.
Solution segment overview: what’s underway and what’s to come
Enterprise Architecture: for technical teams to explain how it all fits together
Cost benefit analysis Business Case: the costs & benefits of each solution
Personas: how the changes will affect different organisations and roles
A cost benefit calculator tool for brokers and carriers is available – please contact LIIBA, LMA or IUA directly to receive a copy of the tool
6.2 Market Association contact details
For further support, please contact your Market Association:
LIIBA: Mark Knight/James Livett
IUA: Louise Day
LMA: Tom Payne/Tim Willcock 20