The Market Reform Group (MRG), which sets priorities for London’s insurance industry, has announced its plans to, in its words, “deliver a new growth spurt that will further cement London as the market of choice for global insurance.”
MRG Chairman Peter Harmer has written to Chief Executives of all London market brokers and insurers to set out the reform program plans for the period for 2009 – 2011.
In the letter he wrote: “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.”
Harmer then reviewed the progress of the reforms in 2008, calling it another “year of solid progress for market reform.” He noted the following:
— ECF [electronic claims filing] 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;
— two hundred and fifty 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.
Harmer then noted the goals the MRG will be focusing on over the next three years include the following:
— Finishing what we have started, specifically getting to full usage of ECF for all claims and moving to the use of structured, ACORD standard, data (e-Accounting) for premium submissions.
— With the necessary foundations effectively in place, building on the existing MRG vision. 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 bulletin also noted that “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.”
Harmer concluded that for the reform program to continue to be successful will require the ongoing active participation of all firms in the market. He challenged Chief Executives to ensure their firms continue to step up in order to reap the rewards on offer.
Paul Jardine, Chairman of the Lloyd’s Market Association and COO of Catlin, commented: “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, Chairman of the International Underwriting Association, added: “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, Chairman of the London & International Insurance Brokers’ Association, gave the brokers opinion of the MRG’s goals. “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,” he stated. That will help us to deliver our clients’ needs and create new business opportunities for the market.”
Lloyd’s CEO Richard Ward put his stamp of approval on the MRG’s plans. “Peter has set the agenda for London for the next three years,” he stated. “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.”
Copies of Peter Harmer’s letter to CEOs and the accompanying MRG Chair’s report are available from the market reform web site at: www.marketreform.co.uk.
Source: Lloyd’s – www.lloyds.com
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