The London Market Reform group has some big hitters behind it to establish real process improvement
As part of their vision to be the market of choice, the London Market Reform Group (MRG) is sponsoring a number of initiatives to ensure London remains at the forefront of the global insurance industry, by delivering real process improvement.
In the London Market there are currently, on average, three endorsements for every contract. Each endorsement has to be evidenced in writing and agreed face-to-face, making it one of the most time-consuming areas of work within the sector.
Global insurance broker Willis has been leading and managing a key project to address this issue – a market-wide endorsements pilot using email – since May this year. Interestingly the pilot has been so successful that the MRG has asked Willis to take the lead on transitioning this project to a phased market-wide roll out.
David Margrett, chairman and chief executive of Willis said: “Our clients and others in the market have a perception that brokers and insurers spend a disproportionate amount of effort and cost on managing endorsements. They would prefer that investment goes into quicker settlement of claims and faster issuance of policies. Willis is therefore allocating time and resources to head up the endorsements project to improve client service across the London Market.”
David Hough, executive director, London Market Insurance Brokers’ Committee (LMBC) added: “The goal of the cross-market team is to reduce the time and effort spent on agreeing endorsements by streamlining the process and providing a structured framework that can be used for e-mail as an interim stage as the Market moves towards full electronic trading. It should also align London and international practices into a common process.”
In order to facilitate the use of electronic transmission, the project team have piloted a new endorsement layout which follows the recently introduced Market Reform Contract standard and which will replace the old so called “honeycomb” layout.
A standard email structure has also been drawn up. These, together with the Market Reform Contract Endorsement Implementation Guide and Endorsement Code of Practice, will form the basis of the initiative.
It is intended that the new endorsement layout will be published in, and optionally available from, this Autumn. The new email distribution method may also be used, again optionally from the same date.
One real positive is that it is a unified objective. The project board responsible for implementing these changes draws representation and expertise from major London brokers, active underwriters, the London Market Brokers’ Committee, the Lloyd’s Market Association, the International Underwriters Association, the Market Reform Programme Office and ACORD. So this has teeth, and that can only be a good thing for Lloyd's and the London Market.