London market to push e-trade

The Market Reform Group (MRG) has announced its plans to deliver a new growth spurt that will further cement London as the market of choice for global insurance.

Peter Harmer, chair of The Market Reform Group (MRG), has told London market brokers and insurers of reforms designed secure London as the centre for global insurance.

The 2009 – 2011 plans include full usage of ECF (electronic claims) for all claims and use of structured, ACORD standard, data (e-Accounting) for premium submissions.

“This will include working with the market to develop a clear picture of the challenges firms will face over the next five years; what firms might need to do to meet these challenges; and which aspects of this work will require market wide collaboration to be successful. This will form the basis of MRG’s ongoing agenda, “ the MRG said.

At the same time MRG will maintain focus on encouraging use of electronic placing and endorsements. This will build on the existing initiatives such as the Lloyd’s Exchange and the progress made by leading firms.

In the letter Harmer says: “I believe that the work we did to deliver contract certainty and the development and use of the IMR represented a major ‘growth spurt’ for this market. But to retain our position in the global industry, we need more progress of this magnitude.”

2008 progress listed includes:

• ECF embedded as business as usual in the Lloyd’s market and significant roll out across companies
• the removal of paper from the original premium process
• 250 firms have signed the IMR agreement – a uniform contract and a crucial milestone. The contract has put in place the necessary legal and operational controls around this key piece of market infrastructure – including SLAs for Xchanging as the service supplier. It will deliver a faster and more robust system for users, even as volumes increase, and
• ahead-of-target progress on reducing legacy volumes such that the FSA has agreed to the cessation of central measurement.

Paul Jardine, chair, Lloyd’s Market Association, said: “Peter’s letter outlines the strategy for the next three years. MRG is united in the belief that this work is vital for the future of our market. It is what our clients want; and it is what our competitors will deliver. We must exceed their progress if London is to remain the market of choice. I echo Peter’s call for all firms to renew their commitment to making market reform a continued success”.

Stephen Riley, chair, International Underwriting Association, said: “Peter has set out the work we need to do to deliver what our clients want – a single point of entry to a London market supported by appropriate technology and open for efficient processing of global business. Clients value London for its innovation and intellectual capital; this work will further remove the frictional costs that have prevented business getting here. It is the blueprint for a profitable London market for the long term.”

Jonathan Palmer-Brown, chair, London & International Insurance Brokers’ Association, said: “Brokers are fully supportive of these plans. We see significant opportunities to improve efficiency and reduce costs, while at the same time bringing greater consistency of processes across international markets. That will help us to deliver our clients' needs and create new business opportunities for the market.”

Richard Ward, CEO, Lloyd’s, said: “Peter has set the agenda for London for the next three years. I, and all his MRG colleagues, are united in the belief that this defines the milestones on the road to the market of choice. I urge all CEOs to meet Peter’s challenge and commit their firms to getting this done.”