Speeding the electronic highway

The announcement last week by Lloyd’s Market Reform Group (MRG) that the electronic claims files (ECF) target was missed brought electronic reform targets into the spotlight once again.

But while meeting targets is necessary to bring under-performing Lloyd’s firms up to speed with electronic reform, it is not the only reform driver.

As was seen with the external group of six (G6), and now with the big brokers, market reform must also be driven by individual companies that participate in the market.

Electronic placement, electronic claims files (ECF) and electronic accounting and settlement (A&S) systems are currently the three key areas in which developments are being made. ECF and A&S reform is overseen by the MRG while companies are left to choose from a variety of electronic placement systems.

“The big bang approach will not work: we saw that with Kinnect,” MRG chairman Dane Douetil said this week in a speech to the market. “Bite-size chunks guided by standards and frameworks are necessary instead.”

The MRG plays an important part by setting targets, as well as leading on other important reform drives.

Sue Langley, director of market operations and North America at Lloyd’s, and a member of the MRG, said she would now begin visiting managing agents that have missed the latest targets.

“Businesses that are slow to adopt ECF and A&S are letting down the market and could potentially undermine the progress that we are making

Sue Langley, Lloyd’s director of market operations

“Businesses that are slow to adopt ECF and A&S are letting down the market and could potentially undermine the progress that we are making,” she said.

But, ultimately, reform will be completed only if reaching targets set by the MRG are coupled with successful reform drives by individual companies.

Kinnect tried and failed to provide a single market-wide solution. So the market was left to develop a broader range of solutions, and integrate them. Individual companies were left with more flexibility with electronic placement.

Thus, companies are looking to tailor their systems to suit their own business needs under numerous frameworks – for example, the Acord London roadmap which most major companies subscribe to.

Because of this ‘one size does not fit all’ approach, there has arisen a dizzying array of IT companies offering their services to the market, ranging from consultancy and advice to software and hardware provision.

But because of the number of competing service providers, offering so many products, companies have been free to push ahead with placement reform faster than their competitors.

It is here that advances must be recognised, in tandem with the advances made in hitting the MRG targets.