2nd July 2021
Robert Dewen examines the results of the Lloyd’s Market Association (LMA) six-month project to reimagine the end-to-end model and vision for Delegated Authority business.
There is much to be said for the work the LMA has undertaken during its process to examine the way it believes delegated authority business should be transacted in the future. The LMA said the data-driven and digitally enabled DA vision establishes a model of choice in pre-placement, placement, and post-placement activities, in a way that re-engineers processes and re-invents how we can distribute, place, oversee and service DA business.
As a company we have been fully engaged in the process. We have participated as and when required, providing our views to the LMA on how we and our clients have and continue to operate. Where the LMA’s process has been different is the way in which it has sought to consult with, and fully engage with, all the stakeholders across the market. It has created a broad spectrum of views and what is pleasing is that there is a clear recognition that the market needs a single version of the system with which delegated authority business is transacted and data is transferred. We have said for some time there needed to be an agreed and clear standard for how data can be effectively and efficiently delivered.
Such a system would reduce the costs of transacting business in the market, and go some way towards the market’s aims of removing unnecessary frictional costs. We see the current inefficiencies daily. It speaks volumes that at Davies we now have 20,000 different mapping templates that we have had to create in an effort to smooth the movement of data which is being received via so many different sources and platforms.
It was pleasing to see the LMA has also highlighted how a single system would benefit the efforts to access loss and claims funds which at present are either not being utilised or are underutilised given the difficulty in their identification. It is not a small issue. At Davies we have been able to free up over £200 million of these funds on behalf of our clients which is now available to be used more effectively.
The fundamental issues for delegated authority business remain around data quality and standards. A single set of standards on which data can be transferred and accessed will deliver many benefits and tackle those issues that currently are driving inefficiencies and costs. I do not think there are any bordereaux that we receive that do not require enrichment or manipulation.
Collaboration will be key going forwards. It is why we are heartened by the way in which the LMA has ensured the past six months have been used to seek the views and ideas of all parts of the market. Brokers, coverholders, and TPAs will welcome these moves, but we all recognise that this will not be a quick fix. What the report will do is add further gravitas to the market’s demands for a DA solution. The question that we will all be keen to see answered in the months to come is how the recommendations will be embedded into the Lloyd’s Blueprint and with how those recommendations will be implemented. We are clearly seeing a change in mentality, from the stakeholders and in particular the insurers.
It feels like progress is finally being made which is encouraging to all those who have voiced their frustrations with the current processes. The LMA’s recommendations have been made after they took the time to look at the whole lifecycle of the market. In the past while there have been numerous efforts to bring in efficiencies it has often been segmented with the result that we have seen a patchwork quilt of solutions which have failed to address the central requirement of a clear single system. The work of the LMA provides the market with a great deal of optimism and now it is a case of turning those aspirations into practice. Our teams stand ready to play our part.
For more information, please contact Robert Dewen, Managing Director of Insurer & Market Services on email@example.com
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