Lloyd’s has released its first report on slip quality since mandating the use of the LMP (London Market Principles) slip at the start of the year.
The study analyzes overall market performance, using a balanced scorecard assessment, i.e. “a weighted average score covering 28 separate attributes of the LMP slip standard.” It concluded that slip quality has improved to 83 percent, compared with 70 percent last year.
Iain Saville, Head of Business Process Reform at Lloyd’s, commented: “The quality of slips has improved since last year. But there is still a long way to go, and we are considering how to ratchet performance up, by improving the timeliness and coverage of reporting so that market users can be given more rapid feedback, including performance tables.”
He stressed that the “use of the LMP slip is an important step in improving contract certainty and in documenting contract terms important for processing efficiency. These results suggest that there are no grounds for complacency.”
The report listed its main findings as follows:
— the balanced scorecard assessment shows that the typical slip is 83 percent compliant – a considerable improvement from the 70 percent level indicated by research conducted last year;
— there are no “hot spots” in terms of either slip content or particular firms, in relation to compliance;
— the vast majority of slips are structured in line with the LMP standard; and
— the LMP Programme Office research suggests that only 13 percent of slips are 100 percent compliant. This is a considerably lower figure than indicated by self assessment checks, and needs to improve.
Lloyd’s noted that it has issued individual reports to larger brokers and managing agents on their individual performance, to help them achieve further improvements. It also said that the “LMP Programme Office, in co-operation with the LMBC and the LMA, is in continuous dialogue with firms in relation to causes of non-compliance; it will intensify its efforts, using the specific findings of this research.”
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