Chief executive sets out plans to drive forward business process reform
Lloyd's CEO Richard Ward has warned that Lloyd's Franchise Board will consider mandating electronic processing if the pace of process reform is not accelerated.
In a letter addressed to the market Ward said that, although much progress had been made, the pace of change was still too slow.
Two initiatives, Electronic Claims Files (“ECF”) and the Accounting and Settlement repository (“A&S”), are key, he said.
“Failure to improve our processes represents a significant risk to the market’s efficiency, ratings and reputation and we cannot miss this opportunity to modernise," Ward said.
"The systems are available, further versions are being rolled-out on schedule and we are not aware of any material barriers to brokers and managing agents utilising them."
Despite this, he said that the market’s take up of A&S, at 17%, was "disappointing."
The published Market Reform Group (MRG) goals for A&S take-up are 40% by end of Q2, 60% by end of Q3 and 80% by end of Q4 2007.
“Failure to improve our processes represents a significant risk to the market’s efficiency, ratings and reputation and we cannot miss this opportunity to modernise.
Richard Ward, Lloyd's chief executive
“Increasing the use of A&S is primarily driven by brokers’ adoption and behaviour. We will continue to engage with the brokers and XIS to improve the speed of take-up and I would ask that you use every opportunity to encourage your broker counterparties to do so,” he said.
Ward added that market level use of ECF over the last two weeks was 28.5% -- also below target.
The published MRG targets for ECF usage are 30% by end of Q2, 60% by end of Q3 and 100% by end of Q4 2007.
In an attempt to improve processes, Ward said the at the end of Q3 the Franchise Board will publish a complete list of performance figures for all managing agents and for Lloyd’s brokers.
He also warned that if the rate of use has not accelerated by that time, the Franchise Board would consider mandating the use of ECF and A&S.
“While progress has been made, the Franchise Board is committed to taking firm action where necessary to accelerate change, but recognises that it is important to signal its intentions at an early stage so that the market can properly plan for the future,” he said.