Contractor reveals £3bn outstanding claims going back five years

Lloyd's Market has 55,000 files of unpaid claims worth an estimated £3bn, according to research by Xchanging Claims Services.

The business processing contractor, which is dealing with the back office systems within the London Market, said some of the outstanding claims date back five years.

Xchanging Claims Services will approach main market bodies and 49 managing agents at Lloyd's this month, to check accurate reserves have been made for claims older than six months.

Managing director Clive Buesnel said: "We are about to launch an enhanced claims review service. The market is desperate for it.

"There are 55,000 files in Lloyd's which have not had any movement for more than six months. They were building up at a faster rate than they were being closed down. There was a lack in pro-activity in chasing them"

He said although most were two years old and related to non-marine business, some files dated back four to five years.

Xchanging Claims Services now hope to begin work on the files by July if proposals are approved. It estimates it would need at least 12 months to go through the backlog, and a team of 20 people would be employed to work on the project at its peak.

"Sometimes the reserving is accurate," said Buesnel. "The reserving is valued at £3bn but that figure might go up or down. If it is clear there is nothing happening let's close the file down."