accounting & settlement peter holdstock senior executive – market processes lloyds market...
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Accounting &Settlement
Peter HoldstockSenior Executive – Market ProcessesLloyd’s Market Association020 7327 [email protected]
Accounting &Settlement
Brokers waiting for carriers to be open for business electronically
Carriers waiting for brokers to bring business electronically
Lack of electronic transactions makes engagement with practitioners difficult
The Dilemma
Accounting &Settlement
ManagingAgents
BrokersInsuranceCompanies
PhaseOne
PhaseTwo
5 11 4
13 25 5
PhaseThree
2128
2947
55
(55)(80)
Lloyd’s Exchange
ConfirmedTarget
Accounting &Settlement
•Aon•Marsh•Willis•JLT•BMS•Miller•Price Forbes•Denis M
Clayton•RK Harrison•AHJ•AJ Gallagher•HSBC•Heath
Lambert•Tysers
Live through RI3K
PlanningA&S is a priorityLEX phase 3Live through
RI3KLiveLEX phase 2No immediate
plansLEX phase 2LEX phase 1Investigating
optionsLEX phase 2No immediate
plansLEX phase 1
Broker ‘Readiness’
Accounting &Settlement
Evidence of management and technical engagement
• Strong participation in Lloyd’s Exchange• Increasing broker ‘readiness’BUTLack of transaction volume• Messaging:
•20 firms connected (5 brokers & 15 carriers)•7 firms transacting (3 brokers & 4 carriers)•3551 risks and 2140 endorsements
• RI3K:•110 firms (2 brokers & 108 carriers)•18,318 risks and 12,878 endorsements
Trading activity
What are brokers plans to transfer existing volumes on to the Exchange?
What really is the intention of firms regarding live trading?
Accounting &Settlement
Source: ‘ePlacement in 2009: An Update’ - Watertrace
Considerable Benefit Underwriter
Considerable Benefit Broker
Benefits from ePlacing
Delivery ofdocumentati
on
Receipt ofquote slip
Placementnegotiation
Quotecreation
Delivery of firm
Order terms
Binding Electronicadvice of
signed line
Endorsements
0%
10%
20%
30%
40%
50%
60%
70%
80%
Benefits during the process
Accounting &Settlement
Complexity
Documents
Market Dynamics
Fu
ncti
on
PlacementNegotiatio
n
Endorsements
Declarations
Quote CreationFirm Order
Binding
Signed LineAdvice
Simple
Complex
Seg
men
tati
on
(E.g
. C
OB
s)
Part
ners
hip
s
100
% P
lacin
gs
Lin
eslip
s
Vertical SlicesCommercial opportunities
Endorsements
Declarations
Horizontal SlicesOperational characteristicsPrivate Public
How to obtain market-level benefits without watering down individual commercial opportunities.
Maintain contact with underwriter
between busy renewal periods. Address client perception that endorsements processing adds
little value.
Brokers’ business strategy
tends to be revenue focused rather than managing cost.
Medium
Accounting &Settlement
The Next Six Months
Proposal being developed for EPSG
o Governance. Clarify project aims and objectives. Re-focus EPSG and EPIG. Increased drive through market associations.
o Use Lloyd’s Exchange Forum to address business implementation needs of practitioners.
o Initiate a Class of Business pilot.
o Refine and embed the EP process from a practitioners’ perspective.
o Work with the market to develop case studies.
o Initiate a program to help the market manage the business change by establishing and running practitioner workshops.
Accounting &Settlement
Peter HoldstockSenior Executive – Market ProcessesLloyd’s Market Association020 7327 [email protected]