it’s coming there will be pain to get the gain who is your business sponsor?

Sample footer, to edit see user guide

Market ReformProgramme OfficeElectronic Claims

• It’s coming

• There will be pain to get the gain

• Who is your business sponsor?

• If you handle claims, the way you do your job will change

ECF Key Messages

Sample footer, to edit see user guide

Market ReformProgramme OfficeElectronic Claims

Electronic Claim File Briefing

Development and Implementation update

21st March 2006

Follow up to last update and demonstration on 1st November 2005

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Electronic ClaimsAgenda

• Introduction and welcome Carl Phillips

• Status review Ian Mallery

• Broker’s view Chris Reay

• Project funding and governance Martin Dyer

• ECF & market reform Andy Brookes

• Questions and close Carl Phillips

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Electronic Claims

Introduction and Welcome

Carl Phillips

Amlin

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Electronic Claims

Status Review

Ian Mallery

Marlborough & ECPG

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Electronic ClaimsLMA ECF Objective

• To replicate today’s file electronically–Not a Blue Sky Claims System development

• Based on existing products

–Changes to CLASS out of scope (except look and feel)–Work with underlying software capabilities

• Provide a base product on day 1–To be evolved once experience gained

• Post implementation of base product–Strategic review of on-going development

– e.g. Third Party Access

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Electronic ClaimsStatus todayKey Enhancements in 5 Phases

Phase 1 - See all documents in one view

Phase 2 - Leader control of file/improved searching

Phase 3 - ACORD DRI (receipt of documents)

Completed 2005

Phases 4/5 – Merged into a single phase

CLASS @ Lloyd’s data through GUI, full DRI and

Seamless link with documents in repository

MAT starts 15 May 2006 (38 days to go!)Live – mid-September

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Electronic Claims

· References· Paid / Outstanding

Amounts· Claim Status /

Agreement· Reports· Correspondence· Bordereau· Placing Documents

ECF Screens

CLASS

Repository

Broker Input

Agreement Parties Can Review All Claim Details, Perform Updates & Record Agreement in One Place

(Without a Broker?)

Data

Documents

Insurer Access &

Input

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Electronic ClaimsScreen shot – Transaction Summary Screen

Screens are currently under development and are subject to change

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Electronic ClaimsWork Completed Since November 2005

• Finalised initial change requests (Big Issue /DRI etc)

• Minimum System Standards – Sent to Compliance and IT Directors

• Convened Technical Implementation Group to advise on ACORD standards

• Review legal governance of electronic claims

– Interchange Agreement

– Initiated Legal Review of Electronic Responses

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Electronic ClaimsSystems Processes & Procedures

• Systems Processes and Procedures– High-level guide– NOT a systems user manual or adjusting manual

• Workshops convened to review generic process and class of business variations

– Confirmed generic process– Confirmed little variation by class of business– A key benefit was to identify the following operational issues:

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Electronic ClaimsSystems Processes & Procedures (cont.)

• Identify the following operational Issues (Hotspots):

– Big Issue Resolved

– Binders Change Request Raised

– Bulks/Blocks Analysis in Progress

– Document Rules Analysis in Progress

– Delegation to XCS Change Request Raised

– M.A. Workflow Change Request Raised

– Partial Markets Change Request Raised

– Non Broker Triggers Analysis in Progress

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Electronic ClaimsBinders & ECF

• Binder characteristics:

–Losses within Delegated Authority– say £25k, reported via periodic bordereau

–Losses above DA but below Market Reporting Threshold (£100,000)

– require separate file but accounted via bordereau

– Individual losses above DA & Market Threshold– require individual file & financials cross referenced with the bordereau

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Electronic ClaimsThe Repository + CLASS model

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Electronic ClaimsFeatures

• Broker submits claim electronically

–Enables parallel presentation to insurers

–Reduces data transcription errors

–Allow brokers to concentrate on complex claims

• Improved insurer access to information

– It’s the insurers’ file

–Concurrent access to all subscribing insurers

–24/7 access, worldwide

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Electronic ClaimsNext Steps

• Phase 5 delivery to MAT mid-May 2006

• Delivers first version

–of an integrated electronic claims service for Lloyd’s

– replicating existing file electronically

–with improvements where possible

–companies and syndicates can see the same claim

• Things change and we won’t have thought of everything

• There will be more issues and enhancements

–Legacy claims

– Issues recorded

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Electronic Claims

A Broker’s View

Chris Reay

Willis

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Electronic ClaimsA Broker’s View

• Mid-Sept launch date is not too far away now!

• 4 brokers publicly committed to supporting this initiative– Aon, Benfield, Marsh, JLT;

– making up approx. 35% premium income* (Lloyd’s)

• 38 days to Market Acceptance testing– Benfield

– Guy Carpenter

– Marsh

– Miller

– Willis

* Source: Lloyd’s Capital & Broker Relationships

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Electronic ClaimsHighlights

• Valuable lessons continue to be learnt from early implementers

• 39 ECF partnerships created

– 6 brokers/17 managing agents, 2 companies – experience gathers pace

• Over 360 claims files

• Generating over 600 transactions electronically to date

• IUA Companies now actively participating in pilots – adding to the ground swell

• LMBC working closely with MRPO to ensure success of project

• Initial feedback from Lloyd’s Brokers has been positive – further follow ups / presentations planned for April / May

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Electronic ClaimsIssues to consider

• Will there be sufficient number of market claims practitioners trained and ready to go live?

• Process issues arising from early implementations will restrict certain business classes / placing processes

• This is a significant cultural shift in how the London market will operate – are we really ready for it?

• The market continues to work together to resolve them

• This is the 1st major step along a new path

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Electronic ClaimsLooking to the future

• The infrastructure has been proven – we’ve got a good base

• Essential enhancements scoped and included in the continual development plan

• Electronic claims servicing is a realistic tool for the London market

• So let’s do away with the luggage and stop walking paper around these streets!

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Electronic Claims

Project Funding & Governance

Martin Dyer

St. Paul Travelers & SDG

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Electronic ClaimsThe Role of the SDG

• SDG reports to LMA Market Processes Committee (MPC)

• Responsible for delivery of CLASS at Lloyd’s / ECF on behalf of Project fund providers (LMA Members)

• Tracks XIS performance against plans / budgets

• Manages changes to scope through Change Request Process

• Ensures Managing Agents are appropriately involved / informed

• Participates in Market Claims Infrastructure Project Board

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Electronic ClaimsTime and Budget Summary

• On track for software delivery to process electronic claims across the Lloyd’s market

• No change to agreed USM & SCM surcharges

• Early implementation partnerships growing

• Substantial market testing and implementation tasks this year

• Will change working practices from paper to electronic for many claims practitioners

• Will not deliver everything on day one - need on-going maintenance and review of Change Request log

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Electronic ClaimsImpact on Budget

• No changes to original funding arrangements

• 2006 surcharges:– 34p USM & SCM for Repository running costs – reduction from 2005– 19p SCM for CLASS at Lloyd’s running costs – 25p SCM from January 2006 for repository development– CLASS at Lloyd’s development (£597k) in three instalments

• Budget Position to the end of 2005– Implementation, Infrastructure and Running costs £1,546,663 – Change Requests £ 365,000 – Total charges incurred £1,911,663 – Revenue from surcharges and other licence charges £2,786,259– Surplus carried forward to 2006 £ 874,596 – CLASS running costs waived for 2005

• The project remains on budget

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Electronic ClaimsFuture

• Operational electronic claims by end 2006 for brokers, Lloyd’s & IUA

• Roll out for processing new claims will continue into 2007

– Increasing pressure on any non participants

• This is just the “Base Camp” - foundation to:

– Migrate to ACORD business messages for claims

– Eliminate CLASS differences across the multiple systems

– Enable third party access e.g. loss adjusters

– Move existing claims from paper to electronic

– Offer client tracking of claims

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Electronic Claims

ECF & Market Reform

Andy Brookes

Market Reform Programme Office

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ECF: Key part of the London process reform programme

• Overall aim:

– A framework of standards for business processes that enables firms to deliver services efficiently to customers at a cost and level of risk comparable with other platforms

• Note:

– Any costs inherent in a subscription market must be offset to deliver this comparability.

– Any changes in business process must be managed in such a way as to avoid undermining the unique qualities/competitive advantages of the London Market.

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ECF is not happening in isolation

• Claims beyond ECF

– Change requests – no system stays put

– Claims infrastructure to include IUA

– Protocols (LMP2001); Lloyd’s Claims Scheme

– Support Claims Strategy & Minimum Standards

• Integration with other reform workstreams

– Accounting & Settlement

– Contract Certainty

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Integration with other workstreams

• Accounting and Settlement

– Measurement checks; A&S repository; A&S strategy for P2P

– Repository use

– London market use of ACORD DRI Standards

– P2P A&S: strategy questions for claims

• Contract Certainty

– More certain contracts = fewer coverage disputes

– Roles & responsibilities clearly defined

– Repositories….again (e.g. model wordings)

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Implementation approach

• Lead implementers

• Prepare to follow:

– Commercial

– Lloyd’s performance standards

– Regulatory better MI pressure

• Sponsors; project managers

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Electronic Claims

Questions & Close

Carl Phillips

Amlin

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Electronic ClaimsAccess

• Can you access the internet from your desktop?

• Are you familiar with looking at messages, data and information?

–On your Personal drives or My Documents?

–On Shared or Network Drives?

–On websites?

• The Insurers’ Market Repository is just another folder of documents

–but market wide

–24/7 access from anywhere– Home, overseas, or even in the office

–controlled by CLASS security access

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Electronic ClaimsWhat should YOU do now?

• Assess and plan for the impact on you

– How many adjusters have you got?

– How many will need access to this system?

– Can you connect to these new services?

– Who will be responsible for implementing in your agency?

– How will you ensure they are trained in CLASS and the repository?

– Are you as a leader prepared for the change of responsibility for controlling the file?

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Electronic ClaimsNext Steps

• This is coming in September – are you ready?

• Deadline for nominating two people:

–project leader, business sponsor

• Slides to go to compliance and head of claims

• 1 page letter to CEOs

• Contact: Market Reform Programme OfficeBen SaylesProject Manager [email protected]

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Electronic ClaimsECF Key Messages

•It’s coming

•There will be pain to get the gain

•Who is your business sponsor?

•If you handle claims, the way you do your job will change