Market Processes newsletter
July and August 2013
In this issue…
Introduction
Welcome to the latest Market Processes newsletter. As there have been a number of announcements and market briefing sessions run in the past couple of months, this newsletter is primarily a round-up of what has been happening with links to further information. Please also continue to consult the 'Bluffers Guide' for information on specific work streams.
Rob Gillies, Director, Market Processes
Central Services Refresh
The Central Services Refresh (CSR) Steering Group approved a services based approach to a review of central services. A proof of concept exercise, involving a limited number of market firms, has established that using business scenarios is a viable means of articulating what the market wants from central services and of developing an understanding of the associated benefits. Firm conclusions are now being finalised. A draft 'Future Services Register' (FSR) is being used to engage with a wider audience using the methodology established during the proof of concept. The CSR Steering Group anticipates completion of the business requirements and benefits work with the market in August 2013 which will lead to finalisation of the programme brief. LIIBA are now better engaged and are represented on the Steering Group.
The Genesis Data Capture Service (DCS) is a component of this FSR and is providing CSR with some valuable early work on, for example, data requirements and process design. The DCS and CSR teams are working closely to progress in a coordinated and aligned way.
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TMEL annual report
The Market Exchange Limited (TMEL) is the market utility that provides an ACORD-based messaging hub to the market. The TMEL Board has recently published its annual report which is available on the LMA website.
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Pro-active premium management
In the last newsletter we reported on the LMA Xchanging Review Board's (XRB) work with XIS to investigate changes to process whereby the leader notifies XIS of a written risk, XIS engages with the broker to encourage an earlier premium submission, and XIS works with brokers to more effectively manage the query process to avoid rejections. While the results to date have been encouraging and point to benefits for managing agents, an insufficient number of risks have passed through the initiative this year to provide data from which to draw firm conclusions. However, the development of the Genesis Data Capture Service (DCS) will, of course, provide this inflow of risks. Consequently, XRB has decided to position the premium management initiative alongside DCS so it can draw on more substantive risk volume with which to test the premium management opportunity.
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Placing platform
Earlier this year a jointly owned company (Placing Platform Limited – PPL) was formed by LMA, IUA and LIIBA as a vehicle to facilitate electronic support for placing. Over recent months the picture has been complicated by the sale of Qatarlyst to Ebix but the PPL Board continues to work on a statement of the benefits of a platform. The ‘carriers requirements’ document (detailing the features underwriters wished to see in a platform) is an integral part of this work. These changes are important to the realisation of benefit by insurers, as is a clear picture of the commitment of broking firms to use of the platform.
Subject to brokers confirming their intention to coalesce around a single (utility) placing platform, the original premise for PPL remains valid. Managing Agents' representatives in PPL remain mindful that insurers want to see benefit from any use of a platform and key to this is commitment from brokers regarding adoption plans and transaction volumes. There is no specific timetable around future developments.
There are indications that other suppliers may be looking to enter this space with alternative platform offerings although PPL has yet to formally consider them.
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Data Capture Service moves to the next phase
Our presentation in the Old Library on 5 July confirmed that the "Request for Information" (RFI) exercise had resulted in the LMA Market Processes Committee (MPC) appointing Xchanging as its preferred supplier for the next phase of the Data Capture Service (DCS). MPC was confident that a number of service providers would have been capable of providing the DCS but were clear that the benefits available to insurers, and hence the business case for adoption by insurers, looked quite different when considering the intention to interface the DCS with downstream central processing. The Genesis Steering Group is now working with Xchanging to define the scope of the pilot phase. A Project Initiation Document will be published on the Genesis secton of the LMA website shortly and our usual market contacts will be notified. Slides from the 5 July presentation have already been posted.
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Xchanging announcements
Xchanging have issued a number of Market Communications recently. You may find the following of particular note. Copies are available on the Xchanging insurance portal.
2013/034 - New interactive services to help on broker payment and XIS submission performance
2013/038 - Purging redundant unsettled delinked transactions
2013/041 - Deferred account scheme - avoiding funding of instalments - change in process
2013/054 - ECF updated systems process and procedure V6.0
2013/062 - ECF change request 99
2013/080 - E-Accounts Release 2
2013/081 - Lloyd's risk codes
2013/082 - Migration of syndicate paper-based reports to PDF
Forthcoming events
Recognising that many of you use the LMG Forum as a monthly catch up with fellow practitioners, the London Market Group Secretariat (LMGS) has introduced quarterly post-Forum coffee breaks to the September 26 and December 17 meetings. Why not make a note in your diary to stay on after the forum for a coffee and catch up in the Willis Auditorium?
And don't forget the ACORD Club meets monthly at Balls Brothers in Minster Pavement on the last Thursday of the month.
Looking further ahead, the annual Insurance Technology Congress takes place on 24 and 25 September. Only one week left to get the early bird discount. Full details are available on the ITC2013 website.
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The latest release of E-Accounts goes live with more to follow
Following the completion of testing, E-Accounts Release 2.0 went live on 15 July. The primary features of this release are the implementation of the premium Deferred Scheme within E-Accounts, additional functionality to enable brokers to load supporting documents to the Insurers’ Market Repository (IMR), and Xchanging's implementation of APIX (Advanced Premium Input at Xchanging - software that reduces reliance on older mainframe software technology).
Development is nearing completion on Release 2.1 which is planned for implementation in November. The most significant aspect of R2.1, which will directly impact Managing Agents, is the introduction of the Carrier Accounting Entries Service (CAES) which enables brokers to account at the same level with London ‘bureau market’ carriers as they do with non-bureau carriers. The CAES split definition is available on the
LMG website.
Where a broker elects to use this service, they will submit premium accounting information to Xchanging at a 'fundamental' level leaving Xchanging to create the 'non-fundamental' splits. This change is part of LMG's ongoing program to remove London idiosyncrasies from brokers and enable brokers to process with the London market at the same level as they would do in other markets.
To facilitate the introduction of this service changes will be made to the USM and Xchanging Account Enquiry service to carry signing number details relating to transactions that have been processed via the new Carrier Accounting Entries Service. Further details are contained in Xchanging's Market Communication 2013/080 which is available on the
E-Accounts page of the LMA website. The E-Accounts programme testing has been extended to include Lloyd's Corporation as well as more Managing Agent involvement, reflecting the wider impact of Release 2.1.
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One-to-Ones with Managing Agents
Members of the LMA Market Processes team welcome the opportunity to visit Managing Agents and provide information on what's happening in the market. We have a rolling programme of offering these sessions but if we have not reached your Agency yet and you would like us to visit, please contact Rob Gillies.
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Overview of the market modernisation landscape
The latest edition of the Bluffers Guide to Market Modernisation has now been published and is available here. In addition to the regular updates on modernisation work streams, a section of growing interest is the glossary. While the market is no different to many specialist industry sectors in its use of system names, technical terms and "TLAs", we continue to expand this section to assist practitioners in understanding the plethora of terminology around the market.
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