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Market Reform Forum
Update on business reform
26 May 2005
Andy Brookes
LMP/Lloyd’s BPR
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Objective: up to speed in half an hour……
A reminder – why we are doing this
Contract Certainty
LMP slips
CC Implementations
Evidence of cover
Supporting projects, including Kinnect
Back office electronic infrastructure
Accounting and Settlement
Electronic Claims Files
What you should be doing
Today special topic: measurement
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Why do this? The challenge
In London sufficient talent (underwriting, broking,advisory) meets sufficient capital to create “a market”
But business is mobile and….. cost of business process is too high operational risk is too high
- lack of audit trail, lack of proper/timely documentation
London does not meet increasing regulatory standards
- Spitzer – transparency; Tiner – certainty
So, London (including Lloyd’s) must improve its processes to Reduce cost Reduce risk Increase transparency
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Contract certainty: FSA challenge
Tiner’s speech: end to “deal now, detail later”
End 2006 deadline
Lit the already smouldering platform
Answering the FSA requires:
- clear plan pulling together components
- measurable progress against that plan
- your participation
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Contract certainty: the programme Key projects
Improve LMP slips – 99% March 2006 During bind: agree wordings; get checking done
- Contract Certainty Implementation, CCI
- 30% of business end 2005; 85% end 2006 Evidence of cover – within 30 days
Supporting projects Kinnect/placement systems –
- Consistent with all this, but reduce compliance cost Policy checking by Xchanging
- Prudential Practice Requirements; binders done; publish open market checks (June); publish compliance stats (Q4 2005)
Legacy- Agree cross market priority rules – end June
- Recalculate stats; that’s it?
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LMP Slips – wider and deeper
March BSA headline: 92%
Continue to check 25% of Lloyd’s slips in 2005; IUA timetable set for companies
LMP Slip 2005
- published in April
Extending to lineslips
- Should be agreed in Q2
- Mandated late Q3?
Monitoring BA LMP Slips – commenced Jan 05- March 05 94%
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Kinnect 3 additional customers announced in May
- Chaucer, Cathedral, Limit/QBE
Three brokers and fifteen carriers
- +60% of Lloyd’s capacity
500 risks, 1300 signed lines and $800m of premium in last year New release 1 June as planned
- Enhanced placing functionality
- Slip creation by brokers in Kinnect
- One-way data flow initially but appetite for two-way
Risk class expansion
- North American property Now
- Terrorism June
- International property Nov.
Further risk classes agreed for 2006 Data light template for any risk class being considered
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Accounting & Settlement
Technical and data information: Phase 1, published in April
- Who is digesting it in your firm/supplier? Views please
- Phase 2 likely to be June (was May) – claims, ORI
Accounting splits: Code of practice being finalised
Migration (legacy and crossover): Complete for premium, claims (Section 2 of technical information)
MRIB and Project Board working on implementation timetable
- Key deliverable is content, sequence and dates in implementation timetable
- Key issue is risk appetite and management: dearer or slower?
- Don’t doubt commitment to progress
- Had planned to publish in Q1, aiming for Q2
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Electronic Claims File Purpose: electronic claims for Lloyd’s (and then…..) XIS development work
Phase 1 - Operational in February Phase 2 - Now live Overall business process spec being signed-off later than planned
- Better end outcome for practitioners; but pressure on timelines Phase 3 DRI design signed-off
- Wider functionality issues; LMA, LMBC and Claims Project Board managing Implementation
6 partnerships operational (was 4) Low volumes – 44 claims completed; major volume increase post-DRI 57 (up from 40 last month) potential partnerships identified
Governance – Project Board and MRIB- Named brokers commit to deliver 100% new claims from Q3 2006
- Named Managing Agents commit to use ECF for new claims from Q3 2006 Live issues
Cross market procedures and practices Policy issues starting to surface eg access control
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Market Reform Forum
Update on business reform
26 May 2005
Andy Brookes
LMP/Lloyd’s BPR