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Electronic Placing in the London Market

 

The LMA provides the lead in developing and promoting the use of electronic processes to support the placement of insurance business in the London Market.

 

The information and resources offered by this project, sponsored by the London Market Group (LMG), are available to Lloyd's Managing Agents, London Brokers, London insurance companies and other interested organisations to support their own evaluation of the opportunities arising from electronic placing and to begin their involvement in the future of risk placement in the London market.

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** For an Introduction to Electronic Placing, download this guide **

 


 

Contents:

 

What Is Electronic Placing

Since its formation, the London insurance market has been reliant on manual processes and hardcopy documentation.  The associated inefficiency; the high cost of handling paper, the lack of control, the lack of immediate availability of records and the delays in serial distribution of paper - with the associated negative impact on customer service and competitiveness - have led market organisations to seek methods to improve this situation by supporting the placement of business with electronic processes.  This requirement has been recognised in the 2009 - 2011 vision of the London Market Group (LMG).

 

Within this context, the Electronic Placing Steering Group  has further defined the vision as:

 

'The use of electronic processes, compliant with ACORD international data standards, for the submission of risk details, the agreement of terms, and contract formation for all risk placements and contract amendments in the London market, enabling the selective use of negotiation outside the electronic process where required by trading partners.'

 

 

The vision sets out a goal; the use of electronic processes to support all aspects of the placement of business, alongside face-to-face or other negotiation where this is seen as desirable, for all business transacted in the market. More detail on this and an accompanying roadmap is available here.

 

 

Put simply, electronic placing is the electronic exchange of data and documents between trading parties to support the transaction of insurance business, whether a new risk, a renewal or a mid-term amendment.  Electronic placing does not replace the face-to-face negotiation of business which is a key strength of the London insurance market and an important part of the transaction of large, complex and specialist risks for which London is renowned.  However, electronic placing opens up opportunities to improve customer service and increase the efficiency of the placing process by using face-to-face more selectively - where it really adds value - and by transferring data and documents electronically rather than solely in paper form.

 

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The Benefits of Electronic Placing

 

Firms in the London market are already actively using electronic placing. They are doing so because they can see how it can improve the service they deliver to their customers and how it can result in increased return on capital. These benefits arise in four key areas:

 

  • strategic business opportunities
  • costs savings and increased operational efficiency
  • improved market transparency
  • improved compliance and business management.

 

Further discussion of the benefits of electronic placing is contained in the Benefits Model produced by the LMA. The Explanatory Notes describe the range of benefits and the operation of the model itself.  The Model is an interactive spreadsheet into which organisations can enter some basic organisational information and draw off a benefits report.  For each potential benefit reported, the model will indicate its likelihood of being achieved by the organisation, when it will be delivered, which stakeholder group will benefit, what the barriers to achieving the benefit are and what organisational changes are needed in order to deliver the benefit.

 

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Who Is Doing What

Information about which organisations are active electronically in which areas of business is essential to building interest and commitment in electronic placing. The LMA produces a Landscape Analysis which presents details of organisations currently engaged in electronic placing and the scope of their involvement.  This document will be reissued on a regular basis to track the developing landscape.

The positioning of suppliers and their various offerings as they relate to electronic placing is also fundamentally important information.  This information is also available in the spreadsheet.

 

 

Getting Started

The LMA's Getting Started guide sets out the basic steps an organisation should take to become involved in the electronic placing of business.  The LMA offers support to all organisations in the London market throughout this process and provides an opportunity for organisations to meet with other users of electronic placing as the data standards, processes and supporting custom and practice continue to evolve.  Details of the LMA's work in this area is described below.

 

 

Driving the use of Electronic Placing in London

The LMA is leading the development and promotion of the use of electronic placing in London, under a project sponsored by the London Market Group.

 

This project responds to LMG's vision with the objectives of:

 

  • creating clarity in the market about the benefits and implications of, and options for, the adoption of electronic placing
  • extending significantly the use of electronic placing amongst organisations in the London insurance market.

 

roadmap sets out the activities currently underway for 2009 to take us towards the achievement of the electronic placing vision. It also gives organisations a clear picture of when and how they can participate in what is happening and, along with the Landscape Analysis, shows the status of potential electronic partners.

 

At the start of 2009 the project was reviewed.  This resulted in the Electronic Placing Steering Group agreeing to a change to the scope of the project and to them identifying four critical success factors for 2009.  These are:

 

  • All functional specifications are finalised

 

  • Broker interest has been converted into broker action with at least ten brokers achieving ‘live’ status

 

  • A single implementation standard and a roadmap for migration to subsequent standards has been agreed; this single standard to be implemented by the start of Q4 2009

 

  • The cultural resistance amongst practitioners has been removed.

 

A full copy of this review is available here.

 

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Resources

The LMA has produced a number of documents and other tools to help organisations investigate and develop processes for electronic placing and to monitor the electronic placing environment.

 

These resources will be reissued from time to time.  To be added to our distribution list and receive notification of these changes and other electronic placing updates, please see Communications below.


Open Resources download page

Communications

We maintain a distribution list for electronic placing communications.  To be added to this list, please email us including your first and last name, your organisation's name, your job title and your telephone number.

 

The latest project update is available here.


Bulletins

The following LMA Bulletins have covered e-placing issues:


LMA07-028-RG
LMA07-053-RG
LMA07-049-RG

Events

The following e-placing events have been held (with links to event material where available):

 

29 Feb 2008

LMA Underwriting Forum - E Placing Presentation

12 Dec 2007

E-Trading at Lloyd's & in the London insurance Market An Infoline Conference

7/8 Nov 2007

Xchanging Conference

17/18 Oct 2007

ACORD Forum London   (No slides)

25/26 Sept 2007

Insurance Day Lloyd's Summit   (No slides)

26 July 2007

Market Reform Forum

8 May 2007

LMA Presentation, Old Library

28 Feb 2007

LMA Presentation, Old Library

 


Contacts

For further information about electronic placing and to discuss your organisation's involvement in the future of placing, please contact:

 

Peter Holdstock (Senior Executive - Market Processes) on 020 7327 8383 or at peter.holdstock@lmalloyds.com 

 

or

 

Rob Gillies (Head of Market Processes) on 020 7327 8377 or at robert.gillies@lmalloyds.com