1. London Market Target Operating Model
Author
Place, Date
Febuary 2018

2. Master information document - Notes for presenters
This document is intended as the ‘master source’ of information about the TOM programme, to be drawn upon as required by TOM leadership when presenting to stakeholders across the London Market about the programme
The document is ‘owned’ and maintained by the LM TOM Change and Communications team and is a core component of the programme’s strategic approach to engagement with the London Market
The document will be continually updated with the latest information about the programme’s progress and priorities and is stored on the LM TOM website here
The slides, most of which include a guiding script in the notes pages, can be adapted according to audience knowledge of the subject
The key is to ensure your presentation in its entirety tells an engaging story – not from the perspective of the programme, but in a way which helps your audience understand what the TOM means for them and customers of the London Market
For further support, please contact LM TOM Change and Communications
PLEASE REMOVE THIS SLIDE BEFORE PRESENTING

3. The case for change
Challenges to the future success of the London Market
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, including the reversal of the decline in London’s share of the global re/insurance market. The key findings were:
London is losing market share, and its position as the first choice for commercial and speciality re/insurance is at risk
The cost and speed of doing business in London is driving business away
The London Market is not focussed enough on its 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
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, including the reversal of the decline in London’s share of the global re/insurance market.  
The outputs highlighted a number of critical issues:
London is losing market share
The cost and speed of doing business in London is driving business away
The London market is not focussed enough on its customers and their needs
The London market is slower to react to threats and opportunities
A lack of standardisation make us less attractive than other markets
Access to market data could be better used for the advantage of individual participants
Competition is the life blood of the marker and will lead to better service, products and more business being done in London .

4. London Market Group response
Driving growth and modernisation across the London Market
London Market Group
Representing the insurance and reinsurance market in London
Telling the London Market story
Making London an easier place to do business
Creating a better business environment
Building a diverse, dynamic workforce
Providing our buyers with a clear case for coming to London to purchase our products and services
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
Developing a better understanding of where the skills shortages are and helping the market address them
To address the challenges identified in the London Market report, four interdependent work streams were established to help the market to grow and modernise – these work streams are mutually interdependent, they are all required to achieve our aims.
TOM (Target Operating Model) is a core component of the Market Modernisation proposal, and its mission to help the market grow by making it highly accessible, efficiently run and relevant to the needs of our customers. The aim is to make the Market easier to deal with, and to reduce cost, so that we can concentrate on delivering a value proposition that makes London compelling.

5. London Market Group response
LMG vision for the London Market and mission of the TOM
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 (LM TOM) 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
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 (LM TOM) 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.

6. London Market Group response
Core principles
The London Market Target Operating Model (TOM) focusses on two principles to deliver this vision and mission:
One touch data capture
Broker and carriers will enter data only once - reducing the risk of error and costly rework caused by entering data multiple times in multiple formats
Enhanced global shared central services
Centralising the market’s collaborative tasks, increasing efficiencies and consistency while avoiding duplication
The London Market Target Operating Model (TOM) focusses on two principles to deliver this vision and mission:
One touch data capture
Broker and carriers will enter data only once - reducing the risk of error and costly rework caused by entering data multiple times in multiple formats
Enhanced global shared central services
Centralising the market’s collaborative tasks, increasing efficiencies and consistency while avoiding duplication

7. London Market Target Operating Model (LM TOM)
Core benefits of the LM TOM to the London Market
Delivering real business benefits to organisations across the London Market
Customer focus
Enable growth
Improved efficiency
Common Standards
Ensuring what we do is aligned to the needs of our customers
Providing London Market participants with the infrastructure for growth
Making the market faster and more cost effective
Doing business in a uniform, and repeatable fashion
Better access
Effective competition
Greater agility
Better data
Making it easier to do business with the London Market
Making it easier for the market to be competitive
Ensuring the market is able to respond to opportunities and change
Putting data at the heart of the London Market
LM TOM delivers real business benefits to organisations across the London Market consisting of the following:
Customer focus
Enable growth
Improved efficiency
Common standards
Better access
Effective competition
Greater agility
Better data

8. LM TOM: built by the market for the market
Strong governance and market participation
LM TOM Steering Board
Market engagement
The TOM Steering Board is chaired by Inga Beale (Lloyd’s) with members from across the market and associations:
London Market
LM TOM ‘communities’
LM TOM Steering Board
LM TOM communities
Key Points:
We have been focussed on looking to achieve as high a market engagement as possible. The TOM Steering Board has senior members from 12 member firms and has a TOM Working Group underneath it with a further 6. We have formed communities for each of the initiatives, a relatively small Subject Matter Expert (SME) Group supported by a wider group of experts this is underpinned by regular work, discussion and guidance of the Associations and committees. Measurement of a ‘typical’ month of the TOM has shown almost 400 individuals from market firms and associations directly contributing to the TOM, many of them contributing in multiple areas.
This engagement is supported by a well developed communications plan for market events and information circulation, as well as on- going meetings with markets firms Boards and teams.
‘Communities’ formed to develop initiatives – one for each prioritised initiative
Each community has a steering group owner and a market champion
Representatives from market associations, Lloyd’s and member firms

9. LM TOM: built by the market for the market
Robust risk management so the programme delivers in line with market expectation
Risks
Mitigating actions
Stakeholder engagement
Lack of engagement, buy-in and support across the market given previous track record of market modernisation initiatives
All of the London Market Associations and their members are actively contributing to the development of the TOM
A comprehensive change strategy is being delivered by the programme’s change and communications team
Capabilities
Lack of skills to deliver large scale change and failure to utilise market expertise
The programme is resourced with full-time experts with appropriate experience to ensure it is professionally run
Each TOM solution is being developed by ‘communities’ comprising subject matter experts from across the market
Market adoption
Low take-up of services due to perceived threat to individual competitive advantages or an unclear business case
LM TOM is developing non-competitive services
A tool will be provided to help quantify the financial benefits – this should encourage take-up 
Certain services will be mandated for Lloyd’s managing agents to ensure sufficient scale 
TOM is an ambitious programme that must succeed where previous attempts at modernisation have struggled.
We have taken on board the learnings from the past and engaged with risk management at an early stage to seek to mitigate the risks
Four key risks include poor stakeholder engagement, lack of capabilities, low adoption of services and weak governance.
We have developed a plan to engage the market on TOM as it develops – from the front office to the back office, and from broker to insurer to service providers. This will be key to success.
In terms of capabilities, we are clear that the programme must be staffed by full-time experts who have experience of successfully delivering major change programmes.
Good governance is a core element of the programme and we are developing a dedicated structure to maximise our chances of success.
Governance
Poor governance of projects leading to initiatives missing key milestones and delivering over budget
Governance implementation with TOM Steering Board, individual project boards, Strategic Design Authority and TOM Working Group operating.  Further improvements in progress, including staffing with market resources not consultants

10. Realising the LM TOM vision and mission
Benefits of the Blueprint
Describe connection of future technology and processes, incorporating innovation
Reshape and refine the TOM
Provide the market with a roadmap of what will be delivered when, and how much will it cost
Define strategic objectives of the programme 1 2 3 4
Building anything needs a blueprint and Modernisation is no exception
The Blueprint builds on the high level design developed during 2015 and supports the two principles that are at the heart of the TOM. The First is one touch data capture, which enables us to enter data once on behalf of all carriers and brokers, rather than each doing it themselves over and over again. It reduces the risk of error and costly rework caused by entering data multiple times in multiple formats – as happens today.
Second, is enhanced global shared central services. This will centralise many of the Market’s non-competitive tasks and make them more efficient and consistent, while avoiding duplication.
The Blueprint had the following core objectives: Confirm the architecture of the overall programme, Validate the priority status of each of the current initiatives, Provide a solution set which enables the market to choose what to implement and over what timeframe, allowing firms to decide how to balance investment against benefits.
For the programme and for each individual solution, the blueprint defines: What is delivered, In what order, What it will cost, What is the benefit?
While the solutions were consciously considered in their own right to maintain choice and ensure hard dependencies did not exist between them, they can be pulled together to show the overall programme.
So what would the market look like if all the Blueprint solutions were delivered?

11. Realising the LM TOM vision and mission
LM TOM solutions: what we are delivering today and solutions proposed for the future
2016 to
2019
Phase 2
Phase 3
Structured Data Capture
Data Integration
Placing Platform Ltd
Delegated Authority
Central Services Refresh Programme
Policy Claims Cache
Claims Case Management
Insurance Tax Calculator
Exposure Management: data cleansing and transformation
Architecture Services
Market Infrastructure
Service Management
Placement & Underwriting: digitising the contract placement process
Transaction Accounting Process
Re-Engineering and Transformation
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 , the TOM Steering Board directed the programme to focus effort on the four priority Initiatives or Solutions. They are:
Placing Platform Limited (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 (DA) – which deals with the significant amount of coverholder business we do in this market
Data Integration, a project to make sure we can move data around the system seamlessly
Structured Data Capture (SDC) - creating digital data to eliminate re-keying and duplication, freeing time for higher value activities
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.

12. LM TOM Solutions: Placing Platform Ltd (PPL)
Moving risk more easily 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
Single model - common standards
Better data
Workload prioritisation
Progress
Marine, Cyber and Medical Malpractice, as an extension of the Financial and Professional Lines, Bloodstock & Livestock and Property & Casualty all went live in 2017
Facilities functionality went live in 2017
29 brokers and 92 carrier firms have signed up to PPL and over 4,900 users have been set up on the platform
Total number of 13,383 risks and 33,192 firm orders have been bound
Total number of 24,234 endorsements have been agreed on the platform
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, single model – common standards, better data and workload prioritisation
Progress
Marine, Cyber and Medical Malpractice, as an extension of the Financial and Professional Lines, Bloodstock & Livestock and Property & Casualty all went live in 2017
Facilities functionality went live in 2017
28 brokers and 92 carriers firms have signed up to PPL and over 4,900 users have been set up on the platform
Total number of 13,067 risks and 33,084 firm orders have been bound
Total number of 23,136 endorsements have been agreed on the platform
Priorities
Energy & Construction, Kidnap & Ransom, Political Risk & Real Estate are the next classes to be made available on the Platform in Q1 2018
Priorities
Energy & Construction, Kidnap & Ransom, Political Risk & Real Estate are the next classes to be made available on the platform in Q1 2018

13. LM TOM Solutions: Central Services Refresh Programme (CSRP)
Moving money through the system more efficiently
Transaction accounting is simplified and standardised, meaning brokers can use the same systems for London as other markets
Better data
Simplified and standardised broker submissions
Reduced costs
Benefits
Faster payment
Improved efficiency
Common standards
Release 1.2 went live in December 2017 and includes the Query Portal. Some further binders claims testing will occur in Q alongside onboarding tests for new brokers
Brokers can process premiums and claims in the same way they can in other global markets 
90% of existing transactions being processed through legacy channels can now be submitted through the new CSRP Post-bind Submission channel
Progress
Transaction accounting is simplified and standardised, meaning brokers can use the same systems for London as other markets
Benefits
Faster payment, Improved efficiency, Common standards, Better data, Simplified and standardised broker submissions, Reduced costs
Progress
Release 1.2 went live in December 2017 and includes the Query Portal. Some further binders claims testing will occur in Q alongside onboarding tests for new brokers
Brokers can process premiums and claims in the same way they can in other global markets 
90% of existing transactions being processed through legacy channels can now be submitted through the new CSRP Post-bind Submission channel
Priorities
Release 1.3 and Proportional Treaty – Plans are progressing well for the final releases. There will also be an ACORD standards upgrade (2016/10) in the next releases. This will include two-way messaging capability
Release 1.3 and Proportional Treaty – Plans are progressing well for the final releases. There will also be an ACORD standards upgrade (2016/10) in the next releases. This will include two-way messaging capability
Priorities

14. 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 the consistency and simplicity for all parties
Benefits
Ease of access
Greater productivity
Better data quality and consistency
Common standards
Progress
LM TOM has selected Charles Taylor InsureTech Ltd (CTI) as the preferred bidder to provide Data Submission, Access, Transformation (DA SATS) service. The risk data standards are being developed in order of binder volume. 27 standards have been agreed. This will enable the quick and convenient submission of risk, premium and claims data
1,500 fewer audits will take place annually
The online audit management system is online with full functionality, with 98% of LMA firms signed up for the service
A Compliance Services Solution is now live. This is part of Lloyd’s ongoing compliance oversight
Audit and compliance will be streamlined and standardised, and data collected only once – creating the consistency and simplicity for all parties
Benefits
Ease of access, Greater productivity, Better data quality and consistency, Common standards
Progress
LM TOM has selected Charles Taylor InsureTech Ltd (CTI) as the preferred bidder to provide Data Submission, Access, Transformation (DA SATS) service. The risk data standards are being developed in order of binder volume. 27 standards have been agreed. This will enable the quick and convenient submission of risk, premium and claims data
1,500 fewer audits will take place annually
The online audit management system is online with full functionality, with 98% of LMA firms signed up for the service
A Compliance Services Solution is now live. This is part of Lloyd’s ongoing compliance oversight
Priorities
Business data requirements delivered to DI/ACORD to create XML standards, which will be rolled out for use in the market
Priorities
Business data requirements delivered to DI/ACORD to create XML standards, which will be rolled out for use in the market

15. LM TOM Solutions: Data Integration (DI)
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
Progress
128 market firms and 438 users have registered for the Market Business Glossary
Building on the coverholder reporting requirements in Release 1. Release 2 is now live and includes the first publication of the new Delegated Authority Risk Standards
Data will be defined once, used consistently and continuously improved so that LM TOM solutions can be properly integrated across the market.
Benefits
Common standards, Ease of access, Better data quality and consistency, Greater productivity, reduced re-work and effort
Progress
123 market firms and 408 users have registered for the Market Business Glossary
Building on the coverholder reporting requirements in Release 1, Release 2 is now live and includes the first publication of the new Delegated Authority Risk Standards
Priorities
Deliver new and enhanced ACORD message standards based on the data and messaging requirements of the LM TOM, supporting integration across the TOM solutions
Over 100 data sets will be released via the Market Business Glossary in 2018, which may also support fulfilling data not available through the MRC from the SDC service
Priorities
Deliver new and enhanced ACORD message standards based on the data and messaging requirements of the LM TOM, supporting integration across the TOM solutions
Over 100 data sets will be released via the Market Business Glossary in 2018, which may also support fulfilling data not available through the MRC from the SDC service

16. The market now has the information it needs to make these decisions
Costs and benefits
A modular approach
Implementation
Costs
Timing
The market may decide to implement all or some of the proposed solutions. It will also have choices about whether to implement certain optional architectural enhancements
There are additional costs for these, but it is entirely up to the market to decide whether to trade convenience for a reduced investment
The market may decide that it wants to alter planned time horizons to access the benefits of modernisation – either speeding up work or slowing it down depending on the amount of budget it has available to it at the time
Implementation
The market may decide to implement all or some of the proposed solutions. It will also have choices about whether to implement certain optional architectural enhancements
Costs
There are additional costs for these, but it is entirely up to the market to decide whether to trade convenience for a reduced investment
Timing
The market may decide that it wants to alter planned time horizons to access the benefits of modernisation – either speeding up work or slowing it down depending on the amount of budget it has available to it at the time
The market now has the information it needs to make these decisions