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Update on Contract Certainty John Harvie Contract Certainty Sponsors and PMs 23 August 2006.

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Presentation on theme: "Update on Contract Certainty John Harvie Contract Certainty Sponsors and PMs 23 August 2006."— Presentation transcript:

1 Update on Contract Certainty John Harvie Contract Certainty Sponsors and PMs 23 August 2006

2 Market Reform Page 1 Market Reform Update Contract Certainty Contract Documentation Processes Back office electronic infrastructure –Accounting and Settlement – design work –Repository for claims and A&S – todays special topic

3 Market Reform Page 2 Contract Certainty – The headlines Market on target to achieve 2006 milestones. Currently ahead of schedule. FSA mid year review complete. –See FSA website for write-up –FSA issues: Quality of data; exceptions; legacy policies; 2007

4 Market Reform Page 3 Key observations on the data The overall score for Contract certainty includes on time and complete before inception, incomplete placements and late placements. The overall score continues to improve for Contract Certainty. Evidence of cover score increases on average with an open market increase but certificate of insurance decrease Summary Brokers score for open market May returns, reported in July was 81% certain, unchanged from April. Brokers score for certificates of insurance May returns, reported in July was 91% certain, up from 89% for April. Overall, the volume of contracts that were certain in May increased to 85%, from 84% in April. The volume of broker contracts between April and May decreased by 17% from 32,858 in April to 27,236 in May. Broker Contract certainty Returns for May 2006

5 Market Reform Page 4 Broker Contract certainty Returns for May 2006 – breakdown for incomplete and late placements

6 Market Reform Page 5 Underlying supporting statistics for Broker Contract certainty Returns

7 Market Reform Page 6 Contract Certainty – The headlines Key meetings coming up with the FSA. –Heads of Associations and FSA 31 st Aug. Review of progress on areas of concern. –CCSC and FSA 18 th Sep. Indicative views on the market solution to date (and potential impact on Plan B). –CEOs and FSA 19th Sep. Broad review. Activity underway in response to FSA –Market Survey –Value measurement –2007 planning –CC measurement alignment –Binding authorities –Legacy

8 Market Reform Page 7 Contract Certainty Market Survey No. of surveys completed so far Only 85 surveys completed –49 Brokers –23 Managing Agents –13 Companies This is only approximately ONE THIRD of the total organisations in the Market!! Please submit your completed surveys by CLOSE OF BUSINESS TOMORROW!!! Purpose of Survey To understand Contract Certainty progress made so far in the London Market To reassure the FSA that Contract Certainty is here to stay!!! Timelines Deadline : 28 th August But really with the bank holiday this is tomorrow!! Results to the FSA : 31 st August Results to you : Mid-to-end September

9 Market Reform Page 8 Legacy Purging facility available Means of not adding Pilot risks to UPR agreed Change request to allow risks where policy not required to not appear on the UPR is being progressed QA session on legacy planned for September

10 Market Reform Page 9 Contract Documentation Pilot Pilot (NA Property, Marine Hull and Aviation Liability) - Good number of visits recorded on the pilot QA tool site but risk volumes very low and not many brokers participating or aware (flagged with LMBC). Meeting held with XIS on alignment of checks with Quartz, to be implemented post October release of Pilot QA tool for all CoBs. Rest of COBs due to rollout end of October. No major issues with testing so far and feedback positive. MR Slip addendum, which details the changes required to be made to a Market Reform slip for it to be used as the contract document in the pilot with chair of MRG.

11 Market Reform Page 10 Accounting and Settlement A&S P2P Overview Design - Outstanding issue around the requirement for a placement message for risks that were not placed electronically. Resolution under review. A&S Detailed Premium Processes - This is currently on schedule for completion at the end of August subject to resolution of the issue above. Output to be published at the end of September. A&S Detailed Claims Processes - This is slightly behind schedule and is expected for delivery in mid-September subject to the resolution of the issue above. The document is currently under review by the market. A&S Detailed Technical Document - This document is on schedule for publication at the end of August, although there may be some changes required depending upon the resolution of the above issue. Franchisor Data Requirements - Required for any Lloyd's managing agent to go P2P, this is on target to be published at the end of September

12 Market Reform Page 11 ECF and A&S repositories 3 weeks to live for ECF & A&S Repository Check Market Reform website for process for joining Remember this is the initial delivery - Base Camp More to come in the beginning of next year Be prepared

13 John Harvie 29 June 2006

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