Shirine Khoury-Haq blog: I have seen the future, and IT works!
We have achieved some real results in making it easier to do business with London. Let’s complete that journey and go the final mile, says Shirine Khoury-Haq.
When we started on the journey to make London an easier place to do business, we were very clear about our objectives. They were:
- One-touch data capture – where brokers and carriers will enter data only once, reducing the risk of errors and costly re-work; and
- Enhanced shared central services – where the market’s collaborative tasks were centralised to reduce duplication and increase efficiency.
We also promised the market, given the history of failed attempts at modernisation, that each Solution could stand independently and that Phase 1 alone would deliver benefits on its own without reliance on future phases.
We have done exactly what we promised, but those benefits are not yet fully integrated. PPL is currently binding 15-19 per cent of total risks. It brings all the placement documents together into a single platform, reducing the administrative burden of using paper in the negotiation process, while creating a strong audit path for compliance which is very difficult to compile in a paper process. If used effectively, it will speed up the placement process and enable data to enter the market process much earlier and with less effort than today.
SDC takes the risk documents and digitises them to common standards, which can then be used just for quality assurance or ingested straight into broker and underwriter administration systems. SDC now processes 8-10 per cent of all Market Reform Contract documents.
DA SATS fundamentally changes the coverholder data submission processes so they submit data once for all their business with the London Market underwriters and brokers, with leaders and followers all seeing the same data. The audit and compliance services ensure that labour intensive processes for coverholders are done only once and in the most efficient way – and we now have 100% per cent adoption across our market.
So what next?
Achieving straight-through processing
What has been achieved in the London Market Target Operating Model is predicted to deliver an annual benefit opportunity of £99m a year. But it only paves the way for more radical transformation – what we have done so far will not (on its own) achieve straight-through processing. It was the first step in modernising the London Market in an environment of high scepticism.
If we were to take the steps that would achieve a more radical transformation, this will provide another £94m of additional benefit opportunity.
We already have some of the key components to support straight-through processing. ACORD standards, standard data, data management services, common services (such as single sign-on) and The Messaging Exchange (TMEL). All of these make it possible for users to come onto market systems and move data around. But we need a few more.
- Digital contract data – this needs to go into the process as early as possible. Then it flows through electronic placement into the market firm’s own systems and straight through to accounting and settlement, providing improved quality assurance throughout the process.
- Claims – the data captured earlier in the risk life cycle can be applied to the claims notification, evaluation and agreements processes and then straight through to accounting, settlement and renewals
- Coverholders – our goal is to onboard a firm, complete the compliance checks and create a digitised process all the way from coverholder set up, binder creation and through to bordereau submission.
And for all of these to work we need central, secure and controlled access to market data.
Completing the efficiency curve
We have come a long way. With fantastic market leadership and support, we have achieved some real results in making ourselves easier to do business with.
But let’s not stop now.
Let’s be brave and keep moving. Modernisation is not a once and done objective, it is a journey of continual improvement. And the original imperative has not disappeared – our industry and markets are more competitive than ever before. Our customers expect us to streamline the entire journey from placement to claims adjudication and settlement. Let’s complete that journey for them – not only to become the only digitised (re)insurance market in the world, but also the very best in serving our customers’ needs today and in the future.