Market ReformProgramme Office

Market Reform in 2005Progress Against MRG Objectives

Andy Brookes

Market Forum15 December 2005

Page 2

MRG Objectives set Jan 05 Has it happened?

• Compliance checking – push for 100% accuracy (Q4)

?

?

96% achieved in October

Aiming for 97% by end of Q4, 99% by end Q1 06

(Anonymous) league tables published

IUA companies participating in slip audit

• Implement LMP standard for Binding Authorities (Q1) and Lineslips (Q2)

Binding Authorities implemented Q1

Lineslips mandated for use in Lloyd’s Oct 05

• Define more of the content of LMP slip (on-going); put this into ACORD data dictionary (Q2); sponsor incorporation of LMP slip within ACORD placement message (Q3/Q4)

?

Updated LMP slip published Apr 05

ACORD Global Placing Document (GPD) produced Jul 05.

Individual class of business headings identified and being incorporated into ACORD standards (dictionary and placement message)

Plan to publish GPD in final form Q1 06

• Further standardisation of the placing process for endorsements

PI schedule to GUA published May 05

LMP S

lips

Page 3

LMP S

lips

LMP Slip Compliance

80%82%84%86%88%90%92%94%96%98%

100%

Jan-Apr

2004

Sep-2004

Nov-2004

Jan-2005

Mar-2005

May-2005

Jul2005

Sep2005

Nov-2005

Jan-2006

Mar-2006

May-2006

Jul-2006

Sep-2006

Nov-2006

Open market[26 components]

Binding authority[41 components]

Target CC attributescore

Source: MRPONotes: The number of binders audited in Sep-05 was not sufficient to calculate a market average

Page 4

LMP S

lips

100% Slip compliance becoming preferred measure

0%10%20%30%40%50%60%70%80%90%

100%

Jan-Apr

2004

Sep-2004

Nov-2004

Jan-2005

Mar-2005

May-2005

Jul2005

Sep2005

Nov-2005

Jan-2006

Mar-2006

May-2006

Jul-2006

Sep-2006

Nov-2006

Open market[26 components]

Binding authority[41 components]

Target fully compliant

Source: MRPONotes: The number of binders audited in Sep-05 was not sufficient to determine a market average

Page 5

MRG Objectives set Jan 05 Has it happened?

• Fully claused slip used for several lines of business (initially 300 risks; Q1-Q2)

?

CC pilot implementations completed Q2

CC Checklist & Code of Practice published Oct 05

Further CC Guidance being published

• Policy production: codify XIS policy checking (binders Q1; other Q2); publish statistics on checking process (Q2); track and reduce error rates (H2)

?

XIS checking codified and published for Lloyd’s Binders and Open Market – QA Tool (IUA to come)

Binder and Open Market rejection reports published (and anonymous league tables) from Q1 05

• In addition

Definition and targets agreed; then shared with FSA

Progress monitored (“not dissatisfied”; “significant progress”)

CC sessions for sponsors and PMs; public Q&A sessions

Con

tract

Cert

ain

ty

Page 6

Con

tract

Cert

ain

tyXIS Rejection rate of Lloyd’s Open Market and Binding Authority submissions

20%

25%

30%

35%

40%

45%

50%

55%

60%

Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05

Open market Binding authorities All

Page 7

MRG Objectives set Jan 05 Has it happened?

• MRIB to set out timetable for phased implementation

X

?

?

Project completely reviewed

New objectives agreed in June 05:

• Radical review of options for A&S ‘end vision’

– supported by MRG

– consulting with market associations

• Introduce A&S repository (‘e-LPAN’) and progress market take up

– scope and requirements agreed Q3

– detailed supplier negotiation Q4

• Introduce measurement regime and performance monitoring

– scope agreed Q3

– QA requirements produced Q4

– statistics published Q1 06

• (At minimum) new procedure for premium (Q4?)

• Complete phased roll-out through 2006

Acc

ou

nti

ng

& S

ett

lem

en

t

Page 8

MRG Objectives set Jan 05 Has it happened?

• Implement Electronic Claims File (repository) – (Q1 2006)

?

Phases 1 & 2 (repository improvements) implemented Apr 2005

Phase 3 – Inward DRI implemented Oct 2005

Repository already operational

• Implement CLASS at Lloyd’s – (final deliverable Q1 2006)

? Key Phase 5 delivery expected Q2; operational end Q3 2006

• Drive implementation by lines of business; 10% electronic (Q4)

?

?

Will fall short of 10% volume target, but early implementations picking up:

– 6 Brokers, 12 Carriers, 8 classes of business

– 300 electronic claim files and near 500 transactions

4 Brokers, 9 Lloyd’s MAs committed to c100% of new claims Q4 06

Target of 75% new Lloyd’s claims by end 2007

• Explain plan for common claims procedure in London (Q4)

X London Market Claims Protocol to be reviewed by MRG in 2006 once ECF take up is established.

Cla

ims

Page 9

MRG Objectives set Jan 05 Has it happened?

• Agree formal training programme with CII (Q2)

?

?

LMP Training Group established

Course outlines and standards agreed

Training organisations developing courses

• Measure use of new infrastructure and (hence) business benefits (on-going)

Benchmarking operation maturing

Programme dashboard for MRG

• Ramp up communication (on-going)

8 Reform Newsletters published

Monthly public forum established

Improvements to website by end Q4

Communications plan for major workstreams Q4

• Agree approach to Legacy wordings (Q2)

?

High level approach agreed Q2 (cross market priorities; data reports; revised unsigned policy list)

Code of practice planned for Q4 05

Oth

er

Page 10

And in addition…

• Governance simplified ?

MRIB and MRGE canned

Three project boards, reporting to MRG

A&S and ECF getting closer together

• Long term goals ? Aims; features; ‘before & after’ spelt out

• Measurement First customer survey completed (for Lloyd’s)

• MRPO Team Strengthened reflecting regulatory priority and market demand

• International Standards Continuing close work with ACORD; Technical group driving repository standards

Oth

er