Electronic Claims
Electronic Claim File Briefing
Development and Implementation update
1st November 2005
Follow up to last update and demonstration on 1st March 2005
1
Electronic Claims
Agenda

Introduction and Welcome
John O'Neill

Status review
Ian Mallery

Market reform context
Mike Smith

Binders work in progress
Rich Woodhams

Brokers view
Trevor Maddison

LMA SDG
Martin Dyer

Next Steps
Ian Mallery

Questions and close
John O’Neill
2
Electronic Claims
Status Review
Ian Mallery
ECPG & Marlborough
3
Electronic Claims
LMA ECF Objective

To replicate today’s file electronically


Based on Existing Products



Changes to CLASS out of scope (except look and feel)
Work with underlying software capabilities
Provide a base product on day 1


Not a Blue Sky Claims System development
To be evolved once experience gained
Post implementation of base product

Strategic Review of On-going development
- e.g. Third Party Access
4
Electronic Claims
Status today
Key Enhancements in 5 Phases

Phase 1 See all documents in one view Completed February

Phase 2 Leader control of file/Improved searching Completed April

Phase 3 ACORD DRI

Phases 4/5 CLASS @ Lloyd’s data through GUI/Seamless link
Completed October

Merged into single phase

Detailed specification completed

Re-planned, including key change requests completed

MAT expected to start Mid-May 2006
5
Electronic Claims
ECF Screens
Data
CLASS
Broker
Input
Documents
Repository
· References
· Paid / Outstanding
Amounts
· Claim Status /
Agreement
· Reports
· Correspondence
· Bordereau
· Placing Documents
Agreement Parties Can Review All Claim Details, Perform
Updates & Record Agreement in One Place
(Without a Broker?)
6
Insurer
Access &
Input
Electronic Claims
Design Sign Off – June 2005

Sign off pack

ECF High Level Rules

ECF 13 Jan 2005 Business Process Description

ECF 17 Jan 2005 Full Requirements Definition

ECF Business Process Models (A and B)

ECF Phase 4/5 Full Business Design

ECF Screen Flow

ECF Screens – Search List & Summary

ECF Screens – Enquiry

ECF Screens – Actions

DRI Diagram
7
Electronic Claims
Business Operability Issues

Two way interoperability to ACORD DRI standards



Solution in hand
Big Issue - driven by the CLASS responses

Need to ensure Concurrent Access

Ensure timely reserving
Solutions available

Mapping of response to distinguish agreement from noting

Notification message to agreement parties – to ensure SCM
- Also available to followers

Followers list added to CLASS

Needs a change in broker practice for settlements with changes in incurred
- Provide incurred change separately from settlement request (currently under
discussion with brokers)
8
Electronic Claims
Features

Broker submits claim electronically
 Enables
parallel presentation to insurers
 Reduces
 Allow

data transcription errors
brokers to concentrate on complex claims
Improved insurer access to information
 It’s
the insurers’ file
 concurrent
 always
9
access to all subscribing insurers
available
Electronic Claims
Market Reform Perspective
Mike Smith
Market Reform Programme Office
10
Electronic Claims
London Market Objectives
To implement the electronic infrastructure
for the London market to negotiate, settle,
and record claims quickly and efficiently
and to achieve a critical mass of live
usage.
11
Electronic Claims
Electronic Claim Files

Enable parallel presentation to insurers

Reduce overall transaction time

Improve transparency of process

Underwriters can control their own work load

Allow brokers to concentrate on those claims
where value is added

Claim file always available to insurers

Fundamental pre-cursor to the LMP objective
of streamlined claims agreement
12
Electronic Claims
Governance 1

Directed by MRG - Brokers, Companies, Lloyd’s
 through

Claims Infrastructure Project Board
Programme Office Owns
 implementation
 issue

definition and resolution
Market associations’ claims groups
 to
13
timetable
resolve market wide claims practice issues.
Electronic Claims
Governance 2
 LMA
- Managing Agents manage contractual delivery to
them from XIS
- Claims practitioners define processes and functions
 IUA
- Formed a group to review function
- Discussing charging mechanisms
 LMBC
- BEFIT – meets to review impact on brokers
14
Electronic Claims
Overall Scope

Delivers an interactive Insurers’ Market
Repository to carriers

Interactive service available to brokers
- At a price

Adopts ACORD standards for the transfer of
electronic documents
 To/From
brokers’ repositories
- At no charge to brokers
 To/From
15
carriers’ repositories
Timeline for Electronic Claims implementation - 26th October 2005 (Update for 1st November MRG Board)
Oct
2004
Nov Dec
2004 2004
Jan
Feb Mar
Apr May
2005 2005 2005 2005 2005
Implementation
partnerships
commenced
Target Milestones
XIS
IUA/
XIS
Aug Sep
2005 2005
Oct
2005
Nov Dec
Jan
Feb Mar
Apr May Jun
2005 2005 2006 2006 2006 2006 2006 2006
10% new Lloyd’s
claims transacted
electronically
Will not be achieved but Board
view number of relationships as
more important than pure volumes
Build and fully tested
XCS operational readiness
Oct
2006
Nov Dec
2006 2006
Ongoing
Slipp
age
Build & fully tested Phase 4.5
Slippage- due
to focus on
Phase 2 MAT
Business design
MAT
Potential delivery of added functionality “5.5”
??MAT??
IUA progress
1. Agreed revised scope
2. Agreed CR business
design
Close to formal sign off
Aviation Direct/Reinsurance
Targets likely to move
towards end Q3 2006 after
completion of replanning
exercise. Continuing
strong commitment from
carriers and brokers.
Slippage due to replanning
and renegotiation
Energy
Non-Marine Property
Non-Marine Liability All Other/PI
Political Risk
Binding Authorities
Lloyd’s published
version
Reinsurance Non-proportional XL)
SP&P
Aug Sep
2006 2006
MAT
Build and fully
tested
Marine - Hull & Liability/Cargo
Lloyd’s version
for comments
London Claims Market System
Process & Procedures
Interchange Agreement
Review, revise
definition of variations
Review, revise,
definition of variations
IUA published version - date
dependent on IUA
involvement
Draft document to be agreed
Aon
Benfield
Implementation underway
Electronic Claims
Jul
2006
*Commitment from:
Brit, Amlin, Limit,
Lloyd’s managing agents processing
Wellington, Faraday,
new claims electronically*
St. Paul Travelers,
Marsh, Aon, Benfield, JLT present 100% SVB, Marlborough,
Hiscox.
of Lloyd’s new claims and their
subsequent processing electronically
MAT
MAT
Phases 1 & 2: Repository
enhancements
Phase 3: Document Repository
Interoperability (DRI)
Phase 4: Enhancements to
CLASS for Lloyd’s
Phase 5: Integrated CLASS and
Repository
Jun
Jul
2005 2005
} Own repositories†
}
Marsh
Guy
Carpenter
Brokers
Cooper Gay
Slow, but gradual take up of
electronic claims on existing
technology. Project Board will be
ramping up presentations etc, to
encourage firms take up in
preparation for new infrastructure.
Benfield
Willis
St Paul
Travelers
Beazley
Aegis
Amilin
Hiscox
Millers
MAP,
Chaucer
Global Aerospace, Allianz, Munich Re, GE Francona
Wellington
Carriers
Limit
Brit
Aspen Re
Alea Group
Legend
Complete
16
XIS
Managing
Agents
Brokers
Faraday
Market
Amlin
Unconfirmed
Kiln
* Training being defined in conjunction with the CII
Heritage
Start of implementation
partnership (Broker
repository)
Start of implementation
partnership (underwriters
market repository)
Ready to participate,
awaiting firm
partnership agreement
Processed
claims
Milestone
Key
Milestone Slippage
Electronic Claims
Systems Processes and Procedures Manual

Documenting how the market process works
 NOT
 but

how to manage a claim
where the systems fit and how to use them
Starting with Lloyd’s
 working
17
draft prepared by LMA ECPG
 under
review with ECPG and BEFIT
 being
extended to include IUA
Lloyd’s Electronic Claims Process Flow (New)
Receive
advice of
loss
Retrieve relevant
documents
Store info
2. Leader Claim Transaction Negotiation
1. Advise Market
Third parties - how
do they create
transactions?
Broker
Repository
- Additional
sequences within
same transaction
Broker
If no broker
repository but
contract with XIS,
then load directly
If PUSH
Broker
LIMCLM
Lloyd’s Leader
Broker analyses
response
Create CLASS
entry
LIMCLM
3. Following Market Claim Transaction Negotiation
Send
documents
using ACORD
DRI
Possible responses:
- Accept
- Pend - broker to amend/
correct
- Query - broker to amend/
correct
- Request broker visit
(informal response)
If PULL
Broker
Notify
DRI
ACORD
message
AT ANY TIME
Review loss information,
slip, wordings,
endorsements and
leader’s additions etc
held on Insurers Market
Repository
Consult with
necessary
parties
Assess loss
advice
Overrides/
Exceptions
Advised of
settlement
authorisation
BSM
- If original premium not
paid may choose to
override need to wait for
additional premium
- If reinstatement
premium due then may
choose to set
simultaneous
reinstatement premium
indicator
- Leader may declare a
conflict of interest
AT ANY TIME
Review loss information,
slip, wordings,
endorsements and
leader’s additions etc
held on Insurers Market
Repository
Overrides/
Exceptions
Assess loss advice
(on IMR) and
Leader response
- If original premium not
paid may choose to
override need to wait
for additional premium
- If reinstatement
premium due then may
choose to set
simultaneous
reinstatement premium
indicator
- Leader may declare a
conflict of interest
Advised of
settlement
authorisation
USM
Advised of
SCM
AT ANY TIME
Review loss information, slip,
wordings, endorsements and
leader’s additions etc held on
Insurers Market Repository
and/or CLASS. Raise
comments to XCS and/or
Leader if necessary. Declare
conflict of interest
Receive &
process
advice &
money
Security
Requirements
XIS System
Advised of
settlement
authorisation
USM
- Additional parties
required?
- Appoint experts?
- Leaders
- Other Followers
Consult with
necessary
parties
Record response,
instructions and
comments on CLASS.
May add documents to
ECF
Audit facilities
- Wrong leader
Receive and verify
CLASS entry
Insurers’
Market
Repository
(IMR)
Insurers’
Market
Repository
Update CLASS entry and
Issue
issue leader responses response
to broker. Update
to broker
agreement parties.
(LIMCLM)
Insurers’
Market
Repository
18
Issue
response
to broker
(LIMCLM)
Issue SCMs
Exceptions
- Update CLASS entry
- Issue XCS responses on
behalf of followers to broker
- Update agreement parties
- Change Leader if
Leader declares
conflict of interest
Management
Information
reporting
Receive &
process
advice &
money
Advised of
SCM
Access
CLASS entry
XCS
Receive &
process
advice &
money
- Additional parties
required?
- Appoint experts?
Record response,
instructions and
comments on CLASS.
May add documents to
ECF
Lloyd’s Followers
Electronic Claims
Possible responses:
- Accept
- Pend - broker to amend/
correct
- Query - broker to amend/
correct
- Request broker visit
(informal response)
Retrieve
documents
using
ACORD
DRI
Access
CLASS entry
Broker analyses
response
4. Advise Market of Completed Claims Transaction
Leaders Action
Awaiting Index
Followers Work
in Progress list
If payment
CLASS posts
payment to central
settlement
Process
settlement
- If original premium not paid, then wait for
premium unless requirement to wait has been
overridden
- If reinstatement indicator set, wait for
reinstatement premium
- Manage withdrawal from central settlement for
reinsurance credit control
Settlement
advices and
money
movement
System
Administration,
logons, user IDs
Electronic Claims
Implementation

Broker-driven
 with
 by
Lloyd’s and IUA carriers and XCS
classes of business and risks
 programme
office monitoring progress

New claims and their subsequent transactions

Using today’s CLASS and repository
 in
parallel with the enhancements
 early
19
experience of electronic work
 assess
impact on procedures and processes
Electronic Claims
Take Up Volumes – 26th October 2005
429 Advices
Of which
291 New Advices
New Advices
35
30
25
Volumes
Millers
20
Benfield
15
Cooper Gay
10
5
Guy Carp
20
Sept
July
May
Mar
Marsh
Jan
0
Electronic Claims
Take Up Participants

Brokers

Carriers
Class of Business

Benfield

Aegis

Cooper Gay


Guy Carpenter
Chaucer
Faraday

Marsh

Hiscox
Kiln
Reinsurance

Millers

Limit
MAP
PI

Willis (in
progress)

St Paul Travelers

Aon (waiting for
DRI)

Aspen Re

Markel
21
Amlin
Marine Hull
Aviation Direct
Non Marine
Property
Binding
Authorities
Electronic Claims
Carriers Wanting to Participate
22
Ace
AIG
Advent
Allianz
Atrium
Beazley
Brit
Global Aerospace
Liberty
Wellington
Electronic Claims
Public Commitment to participate
Brokers
Managing Agents
committed to deliver new
committed to deal
claims to Lloyd’s electronically electronically with new claims
Aon
Amlin
Brit
Benfield
Faraday
Hiscox
JLT
Limit
Marlborough
Marsh
St Paul Travelers
SVB
23
Wellington
Electronic Claims
Binding Authorities
Richard Woodhams
Faraday
24
Binders & ECF
Electronic Claims

Numerous advantages for handling binder claims via
ECF

However some significant technical issues not
applicable to open market claims

Solutions can be considered “work-arounds” pro tem,
pending a tactical longer term solution

Aim of this series of slides is to introduce you to
those issues
25
Electronic Claims
Binders & ECF

Binder characteristics:

Significant level of Lloyd’s premium income is due to
binders

Bordereau of losses, reported monthly
- Volume (if only the bordereau themselves)
- Opportunities to manage workflow

26
Individual losses (above coverholder/ TPA’s handling
authority) all of which may need to be cross
referenced with the bordereau
Electronic Claims
Desktop access, plus linking claims
Indiv.
Block UCR
UCR
Indiv.
UCR
Indiv.
UCR
27
Electronic Claims
Binders & ECF

Additional benefit (in some instances) to enable data
entry to be pushed to nearer the source of origin
- TPA
- Coverholder
- Interaction with experts own repository
28
Electronic Claims
Binders & ECF
Broker
C/Holder
Insured
Leader
CLASS
TPA
XCS
Repository
29
Electronic Claims
Binders & ECF

Additional benefit (in some instances) to enable data
entry to be pushed to nearer the source of origin
- TPA
- Coverholder
- Interaction with experts own repository

Enables timely CAF (plus Minimum Standards
generally) on the sizeable volume of claims
generated under binders

Enables tracking of the claim agreement process

Plus, reduces a significant volume of paper
30
Electronic Claims
Issues

Early implementers:
 Millers,
Hiscox & XCS
 Marsh,
St Paul Travelers & XCS
Set the scene

Binder Group (as a sub set of the ECPG)
 Initially
to identify the potential binder process(es)
 Latterly,
arising
31
to understand and document the issues
Electronic Claims
Key Issue 1 – “Duplication”
Increased volumes of transactions, on above authority
(but below £/$100k) claims
Potential for duplication of reserves both on block
UCR and within individual UCR’s
32
Electronic Claims
Key Issue 2. “Data Levels”
UMR

UCR
1
A valid CLASS entry
“creates” one UCR page
(and a UMR page, if first
advice) on the repository, for
the lodging of claims and
coverage info, respectively
The repository+CLASS model
33
Electronic Claims
The repository+CLASS model
Policy
UMR
UCR
1
TR1
UCR
3
UCR
2
TR2
TR3
Claim
TR4
Transaction
34
The binder on ECF model
Key Issue 2. “Data Levels”
UMR
Certificate
Electronic Claims
Binder Slip held at
UMR level
Certificate
Certificate
UCR
1
UCR
2
UCR
3
Policy coverage info, for each declaration will need to be stored also
at claim (UCR) level
35
Electronic Claims
Key Issue 2. “Data Levels”

eg. CLASS holds only one “cover period”, yet for
binders we have:
- A binder period and
- A certificate period

Plus certain “financial limit” fields

Finally, certain “name” fields
36
Electronic Claims
Key Issue 3. “Block Splits”

Regulatory Block Splits

XCS use a “multi block” facility within their system
 automatically
links constituent parts of a block
collection over the various regulatory State splits
- 1) Repository works at the UMR/ UCR level for each
claim arising under a policy
- 2) XCS system works at a UCR/ Claims Office Reference
(and then, later, at TR) level

37
Which in turn, creates a need for further workarounds, pro tem.
Electronic Claims
Next Steps

Discover and understand the
issues

Merit of early
implementations

Consider both:
38

“Short term” workarounds
to enable early
implementation and
increase volumes

Work to develop and
introduce longer term
strategic solutions



Contact Claire Bulman
Lloyds Business Process
Reform
 Lloyd’s Ext 6513
Claire.Bulman@lloyds.com
Electronic Claims
Working Party

Murray Edwards & Steve
Spicer Miller,

Charles Lee Cooper Gay

Ian Mack, Graham Avery &
John Clouston, Claytons

Martin Chapman, Guest
Krieger

David Bartington, Marsh,

Paul Spicer, Benfields

Paul Bastien, XCS
Claire.Bulman@lloyds.com
39

Paul Farrelly, Amlin

Richard Foulger, Aegis

Laura Bramble & James
Side, Hiscox

Heather O‘Sullivan, Ace

James Roberts & Dave
Southgate, Beazley

Lucy Cooper & Neil
Riddington, Atrium

Rich Woodhams, Faraday

Ray Tytler, St Paul Travelers
Lloyd’s Ext: 6513
Electronic Claims
A Broker’s View
Trevor Maddison
BEFIT & Marsh
40
Electronic Claims
A Broker’s View

Target:
9
months until e-claims becomes reality
 Brokers
4
41
committed to e-claims trading from 3rd Qtr ’06
brokers publicly declared their commitment
Electronic Claims
Highlights

Valuable lessons learnt from early implementers

22 ECF partnerships created – 6 brokers/16 underwriters

429 accumulative volumes transacted electronically to
date

BEFIT and ECPG working closely with MRPO to ensure
success of project

Broker questionnaire to be released to 169 brokers to
understand broker readiness
42
Electronic Claims
Concerns

Process issues arising from early implementations

The ability of brokers and underwriters to adapt to
change

Will there be sufficient number of brokers and
underwriters trained and ready to go live

Big bang vs controlled introduction (new claims)

Handling legacy claims

IUA and Lloyd’s should work in partnership to realise
electronic completeness for London market
43
Electronic Claims
Milestones

The infrastructure is being proved

Electronic claims is working!

Let’s stop walking paper around this market
44
Electronic Claims
Impact on Budget
Martin Dyer
LMA SDG & St Paul Travelers
45
Electronic Claims
Impact on Budget

SDG responsible for delivery of CLASS / ECF on behalf
of Project fund providers (LMA Members)

Tracks XIS performance against plans / budgets

Manages changes to scope through Change Request
Process

Ensures Managing Agents are appropriately involved /
informed

Participates in Market Claims Infrastructure Project Board
46
Electronic Claims
Impact on Budget

Funding provided via surcharges applied to SCM / USM
messages

Revenue and Development costs (pre Phase 4/5 signoff) have
been tracking to plan

Annual operational costs significantly under plan (est. £0.8m)

Q3 review with XIS of Phase 4/5 scope and Change Requests

Agreement now reached with XIS

47

Phase 5 scope finalised

Additional Change Requests included (some excluded!)

Budget fixed for this scope (surcharges to continue as planned
with no changes)

Delivery to MAT in May 2006
Minimum scope change and focus on delivery now is critical
Electronic Claims
Next Steps
Ian Mallery
ECPG & Marlborough
48
Electronic Claims
Next Steps

Phase 5 delivery to MAT mid-May 2006

Delivers first version
 of
an integrated electronic claims service for Lloyd’s
 replicating
 with
existing file electronically
improvements where possible
 companies
and syndicates can see the same claim

Things change and we won’t have thought of everything

There will be more issues and enhancements
49
Electronic Claims
Access

Can you access the internet from your desktop?

Are you familiar with looking at messages, data and information?


On your Personal drives or My Documents?

On Shared or Network Drives?

On websites?
The Insurers’ Market Repository is just another folder of
documents

but market wide

24/7 access from anywhere
- Home, overseas, or even in the office

50
controlled by CLASS security access
Electronic Claims
What should you do now?

Assess and plan for the impact on you

How many adjusters have you got?

How many will need access to this system?

Can you connect to these new services?

Who will be responsible for implementing in your agency?

How will you ensure they are trained in CLASS and the
repository?

How many need general computer training?

What is your approach to reviewing claims information if you are
a follower?

How will the leader’s role change with responsibility for
controlling the file?
51
Electronic Claims
Technology Requirements

PC specification

Windows 2000 SP1 and higher, Windows XP
 Microsoft Java Virtual Machine Version 5.0.3802 or higher
 Pentium 2 750 MHz and higher, 256 MB RAM, 25 MB of free space
 TCP/IP Networking Protocol
 Internet Explorer Version 5.5 SP2 or higher
 Java VM: Microsoft JVM 5.0.3802 or higher
 Sun JVM Plug-in 1.3.1_07, 1.3.1_08 or 1.4.2

Internet connection



52
companies decide on the appropriate connectivity depending on their own requirements
Variables include number of users, number of clients, size of files, time taken for review
of files
Software packages supported
Acrobat Reader (.pdf)
GIF Image (.gif)
MP3 Audio file
MS Paint
MS Visio (.vsd)
TIFF (.tif)
XML (.xml)
AVI Movie File (.avi)
HTML (.htm)
MS Excel (.xls)
MS Power Point (.ppt)
Rich Text Format (.rtx)
URL (.url)
Bitmap Image (.bmp)
JPEG image (.jpg)
MS Project (.mpp)
MS Word (.doc)
Text file (.txt)
WAV file (.wav)
Electronic Claims
Other Electronic Initiatives

ECPG Terms of Reference
expanded to be the reference group for the impact of other
projects on claims practitioners

Claims Minimum Standards

CAF/Claims Tracker

Lloyd’s Claims Scheme rewrite

Solution for Binders

SCM changes
- Leader reserves

53
Accounting & Settlement
Electronic Claims
Contacts


For information

Mike Smith & MRPO
Lloyd’s

Ian Mallery & ECPG
Marlborough

Tim Willcock
LMA

John Ticehurst
XIS

Trevor Maddison & BEFIT
Marsh

Martin Dyer & SDG
St Paul Travelers
To participate in implementations

54
E-mail claims@lmp-office.com
Electronic Claims
Questions and Close
55