New standard to come into force at the end of March
The Market Reform Group (MRG) today confirmed the end of March 2008 as the deadline for the adoption of the new endorsement standard in the London market, alongside detailed plans for the transition to electronic endorsements.
From this date, the standard documentation for endorsements will change from the traditional ‘honeycomb’ to the Market Reform Contract Endorsement (MRCE). This brings endorsement documentation into line with the Market Reform Contract, which was adopted across the London market in Q4 2007. The new endorsement standard will streamline processing and reduce unnecessary bureaucracy.
Each year the London market handles approximately half a million endorsements, most of which currently involve walking paper around the market. The MRG has set out how the market will move from the current paper process to electronic processing of endorsements using e-mail as a first step towards full ACORD messaging.
Joe Plumeri, Chairman and CEO, Willis said: “Paper is in retreat across the London insurance market. Having ditched paper for original premiums, new claims, and bureau policies, we are now setting about removing it from the endorsements process. The prize is big. Perhaps 50% of market endorsements add little to the quality of service perceived by the client; but handling them on paper costs both brokers and insurers plenty. Processing them electronically will cut this unnecessary cost.”
Steve Matanle, Chair of the MRG added: “Improving the endorsements process is an important part of MRG’s plans to further improve London’s position as the insurance market of choice.”
Andrew Kendrick, Chairman and CEO at ACE Europe said: “At present too much of our valuable underwriter time is spent doing admin for contract endorsements. The use of electronic processing, as set out in the e-MRCE plans, will cut this, enabling us to manage the process more efficiently.
John Muir, market wide Project Sponsor, Willis concluded: “Each firm needs to get hold of this issue now. All broking firms should be sending their endorsements into the market in the new style MRCE ahead of the end March deadline. In addition, both brokers and insurers should be digesting the market wide plans for electronic endorsements and planning rapid adoption.”
