Shirine Khoury-Haq blog: A reality check
The last several months of natural catastrophes across the Caribbean, Florida, Texas, Mexico and now California remind us of the absolute necessity for the products and services we sell. The tragedy of communities literally blown away and a rising death toll is a reality check that it is the role of insurers everywhere is to respond properly and swiftly.
Almost inevitably we spend a lot of time thinking, and talking about, the underwriting part of the equation. And indeed, the goal of the LM TOM is to build a modernised London Market to which businesses will want to transfer their risks because it will provide solutions that strengthen their balance sheet, at competitive prices and through processes that are simple, swift, secure and seamless. But it does not matter how good the front end is if when disaster strikes we are not getting help and funds to the places and people that need it most.
And there are stories from across the market that demonstrate that we are doing just that. Companies are putting their claims professionals on the ground so that they can provide a tightly co-ordinated response to brokers and third-party administrators (TPAs). Losses are being paid, in some cases funds were in the hands of policyholders five days after the event. The market is united in a common purpose to deliver on its policies.
The reality, however, is that much of this cover provided by London is through delegated authorities providing a wide range of policies, each of which is governed by a separate contract with individual service level agreements negotiated with brokers. This means that, in the immediate aftermath of a disaster, where information is patchy and the situation is constantly evolving, getting data is challenging.
These scenarios bring to vivid life the complexities that the LM TOM is helping to unravel. Delegated authority business is a core part of the London Market, which is why is it such an important workstream for us. In 2018, the work we have done so far will mean that our coverholders will hopefully find it much easier to work with us.
The reduction in the number of audits is a big win, and the next stage is centralising the process of collecting, collating and analysing compliance information on behalf of the market. Thanks to the fantastic work done by our group of market representatives, we have been able to define a list of the necessary compliance information for all coverholders and this process will be managed by Lloyd’s in 2018.
And it’s not just about the Delegated Authorities (DA) stream of work. Placing Platform Limited (PPL) supports face to face underwriting with absolute clarity on coverage and an audit trail that will minimise Errors & Omission (E&O) risk. Central Services Refresh Programme (CSRP) will enable the faster movement of premiums and claims. The Data Integration (DI) stream, including Structured Data Capture (SDC), will ensure that our underwriters, brokers and coverholders have access to accurate data faster and more efficiently than ever before.
It is very easy to get sucked into the detail of any programme that seeks to bring about significant changes – and the LM TOM is no exception. But we must keep our eyes on the bigger picture and we must check in with the reality of the world we inhabit by continually reminding ourselves who will be the greatest beneficiaries if we get this right.