Savings in excess of £50m a year could be achieved if proposed accounting and settlement reforms are adopted in the London Market, according to a report by a London Market Principles (LMP) steering gr ...
Savings in excess of £50m a year could be achieved if proposed accounting and settlement reforms are adopted in the London Market, according to a report by a London Market Principles (LMP) steering group.
The report by the Accounting and Settlement (A&S) Steering Group said that the adoption of the Association for Cooperative Operations Research and Development (Acord) XML standards will generate significant savings in transaction and operating costs in the London Market. The Acord standards would replace the existing paper and bespoke accounting messages used for premium and claims payment processes.
In addition to the cost savings, the report highlighted other benefits, including: faster processing of premiums and claims; greater flexibility in processing business; improved customer service; and the removal of barriers preventing the flow of international business into London.
The report notes that the estimated one-off implementation cost of between £64m and £76m would be recouped within two years should the wider market adopt the proposal. The costs of implementation reflect differing technology systems used across the market.
A&S Steering Group chairwoman Marie-Louise Rossi said: "It is very important that the whole of the London Market supports these proposals so that the efficiency gains and cost savings on offer can be achieved quickly."
The proposals have been welcomed by the market. Aon director of operations Bill Oram said: "The proposals offer a major step forward. Without the technology infrastructure proposed our market will remain locked inside an anachronistic environment that will become increasingly uncompetitive with the rest of the world."