The Market Reform Group (MRG), which directs the efforts of Lloyd’s and the London insurance market to move from paper to electronic processing, has issued its latest bulletin. It focuses on the committee’s efforts to get the Lloyd’s market to use the recently installed Electronic Claims File (ECF), and notes that the 10,000th claim was recently posted on the system.
Dane Douetil, Chief Executive of Brit Insurance and Chair of the Market Reform Group commented: “We welcome the progress being made by those firms actively using ECF. These firms have demonstrated that there are no significant impediments to adoption of electronic claims, and, if current trends continue, they will be achieving very high rates of usage by the end of the year. The message is therefore clear to those firms that are not being as quick to embrace the system – do so or risk being left behind by your competitors.”
The numbers, however, are less than the goals set earlier in the year. “Use of the new system by managing agents and brokers is currently running at 45 percent of the total market volume of in-scope claims, up from 5 percent at the start of the year,” said the MRG bulletin. While it called those figures “significant progress,” the MRG also noted that it’s behind its target of 60 percent for the end of the third quarter, “making the end year aim of 100 percent electronic notification of in-scope claims more challenging.”
Sue Langley, Director of Lloyd’s Market Operations & North America, reacted immediately. ” I share the disappointment of Dane and a number of market participants in the failure to achieve our targets,” she wrote in a bulletin on the Lloyd’s web site (www.lloyds.com). “There can be no let up on our drive to meet these. Reforming our processes remains essential to ensuring our future success and competitiveness. We simply have to change.”
The MRG noted the following, concerning the ECF system:
— Forty-four broking firms are now live on ECF. These firms are responsible for 79 percent of the total claims volume in the market.
— All Lloyd’s managing agents are now processing new claims via ECF.
— By the end of the year, nearly all brokers with significant claims volumes will have gone live, accounting for close to 100 percent of market volume.
— The brokers currently live and actively using the system are, on average, processing 57 percent of their claims business electronically.
— The level of use varies considerably among the live brokers, with a small number already achieving 100 percent electronic processing of their in-scope claims.
In the company market, 13 firms, representing in excess of 50 percent of total claims volume are actively receiving claims electronically. A further seven firms have plans to do so this year. All company market insurers are committed to adopting the ECF system during 2008.”
Langley singled out a number of Managing Agents and Brokers, whom she said “are leading the field and are already using ECF for on or close to 100 percent of inscope claims. She listed them as follows:
Aegis Managing Agency Ltd; Beaufort Underwriting Agency Ltd;
Liberty Syndicate Management Ltd; Limit Underwriting Ltd
Managing Agency Partners Ltd; Newline Underwriting Management Ltd;Novae Syndicates Ltd and Pembroke Managing Agency Ltd.
She also singled out the following brokers for their ECF performance: broker side include (In alphabetical order):
Aon; Benfield; Cooper Gay; Glenrand Limited; Guy Carpenter; Marsh;
Newman Martin & Buchan and Towers Perrin Clayton.
Langley noted, that their success demonstrates “that electronic processes are working. I appreciate that change is not easy and that hurdles need to be overcome but the excellent progress of many organizations in the market show that this is achievable. Businesses that are slow to adopt ECF and A&S are letting down the market and could potentially undermine the progress that we are making and poor performance will be acted upon.”
She also indicated that all market CEOs have now received a “second monthly update,” and warned those who are behind schedule that she “will start to visit the worst performing managing agents to review why they are not using ECF and how they plan to increase traction. If necessary, this will be followed by a detailed audit.”
Langley added that as of 2008, “it will be a requirement of new market entrants to use ECF for all inscope claims. I hope that current market progress at that time will not require any mandate or further action but I would like to re-emphasize that all options remain open as Lloyds are serious about reform.”
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