electronic placing in the london market market reform briefing rob gillies lloyd’s market...
TRANSCRIPT
Electronic Placing in the London Market
Market Reform Briefing
Rob GilliesLloyd’s Market Association
• What is electronic placing and what’s in scope
• Who’s doing what
• Experiences and lessons so far
• A look forward
“They always say that time
changes things, but you actually
have to change them yourself”
Andy Warhol
1700 2000“They always say that time
changes things, but you actually
have to change them yourself”
Andy Warhol
2010?
Improved efficiencyReduced costs
Exploit strategic business opportunities
Why change?
Global and market change
Customer service demands
Need for increased return
on capital
Agents for Change
• The global marketplace
• Convergence of insurance and capital markets
• Growth of self-insurance
• High transaction costs
• Market process inefficiencies
• Restrictive practices
(Dennis Mahoney – Acord Forum London, 2007)
What is electronic placing?
Face to Face
Complex
Face to Face, Telephone, Electronic
Moderate
Electronic
Simple
Negotiation
Data Exchange
Strategic Opportunities
Increased Regulatory Compliance and Increased Market Transparency
Reduced CostsIncreased Operational Efficiency
Electronic exchange of data and documents
Selective use of face-to-face negotiationenables
Benefit delivery Benefit delivery
Improved customer service + Increased return on capital
Benefit delivery
Improved management information
Earlier sight of data and documents
Improved access to marketsMore productive use of time
Electronic exchange of data and documents
Selective use of face-to-face negotiationenables
Brokers (examples) Insurers (examples)Benefit delivery
Improving the broker-insurer relationship
Resource: Electronic Placing Benefits Model
Increased quality negotiating time
Opportunity to grow businessIncreased attention to the
customer
Who’s doing what?Lloyd’s Brokers• 4 trading live• 4 investigating and developing
Insurance Companies• 1 trading live• 8 investigating and developing
Managing Agents• 7 trading live• 22 investigating and developing
160 ‘markets’ reported to be trading with Aon via Ri3K
Much increased general level of interest over 2007
Resource: Electronic Placing Landscape Analysis
Experiences and lessons so far
Technological Barriers• Upgrading internal core systems• Conflict with other projects• Conflict with other reform activity• Integration with front and back office systems• Development of functionality by suppliers
Process Barriers• Failure to deliver minimum levels of value required by
organisations to participate• Version control between paper and electronic slips
and other documents• Duplicate processes – EP and non-EP• Slip signature and evidence of cover• Predominance of Outlook as user interface and
‘workflow’ tool• Differences between London and international
processes
Other Barriers• Absence of market critical mass• Absence of key trading partners• Absence of leadership (CEO) support and
endorsement in firms• Failure to recognise the benefits• Reluctance to accept the benefits as a convincing
business case• Failure of firms to simplify the benefits message and
relate to the firm
Behavioural Barriers• Fear of the impact on jobs, work routines, lifestyle,
etc• Workload• Market reform and change burnout• ECF and A&S seen as a priority (politically easy
‘back-office’ functions)
Other Barriers• Absence of market critical mass (1)• Absence of key trading partners (2)• Benefits not yet fully recognised (3)• Lack of leadership (CEO) support and endorsement in
firms (5)• Reluctance to accept the benefits as a convincing
business case• Failure of firms to simplify the benefits message and
relate to the firm
Behavioural Barriers• Fear of the impact on jobs, work routines, lifestyle,
etc (4)• Workload• Market reform and change burnout• ECF and A&S seen as a priority (politically easy
‘back-office’ functions)
Top Five Barriers to Adoption
Look forwardDevelopment• Enhancement of the data message• Value of the data• Compatibility with accounting and settlement
processesMarket Engagement• Brokers• Carriers• Suppliers
Vision, Objectives and Roadmap• Developing a common picture of the end game• Knowing whether we’re getting there; metrics• Target driven adoption?
2010?
Electronic Placing
Accounting and Settlement
Electronic Lifecycle of the Risk
Claims adjustment and settlement
Evidence of Cover
Risk Renewal
Contract Amendments
Rob GilliesHead of Market ProcessesLloyd’s Market Association020 7327 [email protected]
Resources: www.the-lma.com