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Market ReformProgramme Office
Market Reform Forum
Christopher Croft, MRPO
Thursday 23rd August 2007
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Market Reform Update
• Developments in the past month
• Upcoming work and plans
• Special topic – “How to get to 100% on ECF”
– Charles Lee, Cooper Gay
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Contract certainty - Headlines
• Performance continues to exceed 90% target – June brokers’ achievement rate – 95%
• …..in line with managing agent (94% June) and company data (97% June)
Overall Contract Certainty achievement
80%
90%
100%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Broker CC rate MA CC rate Company CC rate
CC MRG target
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Contract Certainty Survey – next steps
• Contract Certainty survey to be rerun in September
• Part of the commitment to FSA
• Aim to demonstrate that CC approach has been embedded as business as usual
• Wherever possible, questions will be the same as last year to allow comparison
• Aiming to circulate via Associations in w/c 3rd September for completion by last week of the month
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CC survey – where were we?
Contract Certainty Systems & Controls% of firms: Total Market
1% 8%
13%
31%
43%
4%
Substantially underdeveloped
Underdeveloped
Well established
Very well established
Embedded
N/A
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CC survey – what will happen with the results?
• Will depend on outcome…
• Feedback at market level to FSA a (hopefully) good message
• Any issues will be addressed via the Associations and a reconvened CCPB (if necessary)
• A good message will help with our conversations with FSA on legacy
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Legacy
• Lloyd’s index currently 41% July
• IUA 52% June
Legacy Index
0
20
40
60
80
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Lloyd's Index Interpolated quarterly target
Quarterly target Company market index
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Legacy in 2008
• Need to determine strategy for dealing with residue – cases where “current documentation prevails” is the best answer
– Insufficient counter parties still in existence
– Live claim in progress
– Little potential for a claim
• In all instances, if the (re) insured wants a policy, firms should do their best to meet this requirement
• FSA interested so need robust plan and consistency across market
• Discussing with representatives from Associations, Lloyd’s and practitioners
• Recommendation to MRG in September
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Market Reform Contract
• New “slip” standard published in June. Mandatory in Lloyd’s market from November 1
• Q&A from market sessions and from issues raised with Associations on MRPO website
• Binders and Lineslips
– Working on any required changes
– Unlikely to be mandatory before 01/01/08
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MRC further assistance
Brokers:
Email: [email protected]
Phone: 020 7397 0213
Lloyd’s Insurers:
Email: [email protected]; or
Phone: 020 7327 3333
IUA Insurers:
Email: [email protected]
Phone: 020 7617 4445
General Queries:
Email: [email protected]
Phone: 020 7327 5278
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ECF
• Lloyd’s ECF take up on track - 41.3% of in scope Lloyd’s claims (4 week average)
– 6b NOW LIVE
– Singleton binders now in scope
– All binders, except co-lead, in scope
– Political risks can now be processed via ECF
– Agreement party routing improvements
• IUA use of IMR for claims: continuing the transition to live
– 16 firms accepting claims via ECF
– Represents in excess of 50% of company market
– Work in progress: - service contract; functionality enhancements; operational costs; workarounds
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Accounting and Settlement
• A&S use of IMR: better but still disappointing
– 24.5% of submissions sent electronically in July
– 65 firms now ‘switched on’ and able to use the A&S Repository and these firms account for around 62% of the total submission volume.
– MRG reviewing ‘end date’ for the van. Includes addressing issues that might be hindering take up
A&S electronic submission as proportion of total
0%
20%
40%
60%
80%
100%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
A&S electronic proportion Interpolated quarterly target
Quarterly target
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Delinking
• A&S Delinking
– Ahead of target >60% by end Q3
– MRG reviewing ‘end date’. Includes addressing any blockers.
– Brokers receiving individual data
Delinked rate
0%
20%
40%
60%
80%
100%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Delinked rate Interpolated quarterly target Quarterly target
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Delinking – year on year comparison
0%
10%
20%
30%
40%
50%
60%
70%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2007 Delinked % 2007 Mkt Avg 2006 Delinked % 2006 Mkt Avg 2005 Delinked % 2005 Mkt Avg
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Electronic Placement
• LMA Bulletin issued on 16th August (via Associations or see www.the-lma.com)
• Electronic Placing Steering Group to meet for the first time on 24th August
• LMA have developed a briefing pack for all interested participants
• Landscape analysis and benefits model due for publication in September
• Peter Holdstock
– 020 7327 8383
• Rob Gillies
– 020 7327 8377
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Endorsements
• Objective: streamline documentation and process
• MRG July meeting:
– The work should no longer be referred to as a pilot but should seek to transition to a phased market roll out;
– For brokers and insurers already involved in the pilot this means a concentration on ramping up volumes;
– For those firms yet to get involved, focus on enabling them to do so; and
– Extend the process beyond the current business classes.
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Endorsements
• Responding to MRG challenge
– Alignment with MRC - an endorsement code of practice describing what an endorsement, its agreement and its evidence constitutes.
– Alignment with Electronic Processing project - consistency with process and how remote agreement is achieved.
– Interim mechanism - e-mail guidelines for those not yet EP enabled.
– Robust implementation plan for wider adoption of the remote endorsement agreement processes
– More formal documentation for users.
• See Newsletter and Stuart Dean at September Forum
SLIDE 18
ACORD – Key dates for London in 2007 TCF
DRI messages Complete Placing messages Complete Accounting messages August 2007
Placing Implementation Guide Complete for current work load Complete Updated for London Endorsements Q3 2007
Accounting Implementation Guide EBOT August 2007 ELPAN2 August 2007
DRI guide Enhanced Final Draft
Forums IT Club Ongoing Solution Providers Forum Ongoing
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Other news…
• Beginning discussion of reform agenda for 2008 with Associations.
– Welcome input
– Email [email protected]
• Steve Hulm…the return
• Next forum Thursday 27th September
• Want to talk…?
– General reform updates/discussions
– Specific topics – MRC, IMR etc
– Email [email protected] to arrange
Peter Dalton – Business Sponsor
Charles Lee – Project Manager
Dec-06Jan-07
Feb-07Mar-07
Apr-07May-07
Jun-07Jul-07
S1
63% 68%81% 93% 100% 100% 100%
100%
Percentage ECF within scope and underwriter participating
How did we reach 100%?
Project team to focus claims handlers– All brokers trained (roles changed)
– Buy in from team who understand the benefits
Excellent IT department (no major IT issues encountered)
Close connection with receptive underwriters and market associations
Collaboration with like minded broking houses
Ethos is “we use ECF”
Monitoring our own failings (and reasons) was vital
July 2007 ECF
July 2007 ECF - Lloyd's ECF - CompanyNon-participatingCompany Out of Scope
CLASSCompanynot handlingelectronically
Repository RulesSignatory but notTradingelectronically
% 24 3 41 8 18 6
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Jun-07
Jul-07
12%
24%22% 23%
31% 31%
26%25%
Percentage ECF from all new claims
May-07
Jun-07
Jul-07
53% 65% 76%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Potential Percentage of new claims that could soon be traded ECF
Questions?
