Progress made on ECF; A&S submissions to be electronic from today
Lloyd’s, the world’s leading specialist insurance market, today published a first quarter update on the progress made on the key areas of business process reform: Electronic Claims Files (ECF), Accounting and Settlement (A&S) and Contract Certainty, as well as outlining the next steps in the business reform programme.
Over the last three months, the market has continued to make significant progress towards improving its business processes, demonstrating its continued commitment to becoming a more efficient and cost effective place to do business.
Electronic Claims Files (ECF)
Significant progress has been made to date which has seen ECF use increase from 30% at the start of 2007 to 88% by the end of 2007 for in-scope claims.
The market is now regularly processing over 90% of in-scope claims electronically and ECF is becoming fully embedded in day to day business processes.
Broker take up has been good. Currently 97% of brokers by volume are using the ECF initiative. All Space claims are now in scope and excellent work has been completed by all involved to move these claims in to the in-scope category. All of this progress means that we are providing a better service to our customers.
Accounting and Settlement (A&S)
The vast majority of accounting and settlement original premium submissions are now handled electronically. From 1 April, all original premium submissions, with the exception of a minority of exclusions agreed with the Market Reform Group, will be processed electronically and Xchanging will cease to support the processing of paper original premium submissions. All additional and return premiums must be processed electronically by the end of 2008.
There is market wide agreement that the use of electronic processing for accounting and settlement submissions has benefits for both clients and the market. The system allows for the faster movement of premium, utilising technology to remove a paper process. This is a step towards improving the accuracy of submissions and increasing efficiencies which lead to lower operating costs and an overall reduction in operational risk. This combination will lead to an increase in the quality of services provided to the client.
Contract Certainty:
It is recognised that the market is now regularly meeting the FSA’s requirements on contract certainty which is now fully embedded in its day to day processes.
With Contract Certainty now consistently above the 90% target in most areas, the FSA has stated that they no longer require the market to continue monitoring contract certainty levels.
The next steps
The next step in the reform programme is to look at how the market manages accounting, regulatory and tax information, and the possibility of engaging a ready to use service to support electronic placement.
Lloyd’s is considering a variety of options in this field, including the use of a messaging hub that allows managing agents and brokers to communicate via a system that utilises ACORD standards. Hubs such as this are a staple feature in other financial services and commercial sectors and Lloyd’s is looking into how such systems can be used to benefit the market.
Lloyd’s will explore the feasibility and demand of such a system over the coming months.
Sue Langley, Director Market Operations & North America:
“The market has clearly demonstrated that it is more than capable of adapting to new ways of working.
“We have made significant progress in the areas of Contract Certainty, Accounting and Settlement and the Electronic Claims Filing system. We intend to finish what we’ve started with the current initiatives and press ahead with the next stage of the reform programme. These reforms will ensure we offer an excellent standard of service to our customers”.
