Control Framework
A warm Welcome
to
the June
market Breakfast Group
Control Framework
Breakfast Group agenda
9:00
Arrival, breakfast & networking
All
9:15
Welcome
Ali Dove
9:20
Phase II project update
Jaana Rouvari
9:40
Bordereau management and
Control Framework
Ness Macintosh
& Linda Stannard,
Capita
10:00
Lloyd’s Relationship Management
Sue Baker
10:15
Q&A
All
10:30
Celebrating success & Close
Ali Dove
Control Framework
Control framework Phase II
update by Jaana Rouvari
3
© Lloyd’s
Control Framework
Market progress against milestones
Milestones
100% completed
1.
Initial meeting with Lloyd’s & Project resources in place
2.
Verify CH in phase II & risk ratings completed
3.
Audit plan for high risk CH in place & project delivery timeline confirmed
4.
Agreed plan/deliverables for up to end of 2014
5.
Agree broker/coverholder communications & assess risks, identify controls and gaps
6.
Evidence remediation plan
7.
Agree assurance to be shared with Lloyd’s
8.
Formal sign off
Completed
In progress
Not started
© Lloyd’s
Control Framework
Flexing the approach to suit the risk profile
Data from start to end
Auditor
Coverholder
systems
Broker
Managing
agent
Xchanging
Validate
Raw information
5
© Lloyd’s
Control Framework
Flexing the approach to suit the risk profile
Risk profile
1) Full audit?
Last date of audit
+
=
2) Light touch cut down scope?
3) Desk based review?
What other ways you have flexed your approach?
Discuss around your tables – 5 minutes
Please leave us your feedback to share with others!
6
© Lloyd’s
Control Framework
Managing Agents – What do you need to be thinking about?
• Talk to your brokers!
• The team at Lloyd’s is here to help you, we can:
- Centrally share your risk ratings with your brokers
- Introduce you to our control framework broker contacts
7
© Lloyd’s
Control Framework
Brokers – What should you be thinking about
Do you need to enrich data received from coverholders?
If you need to manually enrich data, can you evidence the
processes and controls you have in place?
If you have automated systems/ controls, can you share how these
work?
If you have binders in multiple business units, can you evidence
processes and controls for each division?
Remember, coverholder ratings are based on tax and regulatory risk, they do
NOT indicate a good vs. bad coverholder
8
© Lloyd’s
Control Framework
Support available for Brokers
• Get a flavour of where to concentrate, talk to the Lloyd’s project team!
• Who should we be talking to? Make sure the Lloyd’s team has the right
contact details for your company to streamline communications
• Find out from the Lloyd’s team the right people at managing agents to talk
to
• Put yourself in the driving seat and be proactive!
How to get started? – Some great examples of what your peers have done
9
© Lloyd’s
Control Framework
New stuff
Martin Baker – Stakeholder Manager
New FAQ online regarding run off business
New broker content coming online soon!
10
© Lloyd’s
Control Framework Breakfast
Bordereaux Management and the Control Framework
Lessons Learnt – June 2014
Listen Create
Deliver
A journey into the unknown – and using the lessons
learnt to create a complete Binder solution
Agenda:
1. Introduction
2. DVD
3. Objectives
4. Challenges / surprises / solutions
5. Action Plan / Results – to date…
6. Future
7. Analytics
8. Conclusions
Binder Management Services (Video clip)
http://www.youtube.com/watch?v=caWxR2
fBrxQ&feature=youtu.be
Singapore Objectives
‘Provide a solution to capture and monitor schedules and bordereaux in
Singapore so that credit control can be performed and reported on at the
detailed schedule / declaration level’
Remembering that:

Items need to comply with control framework

Items need to be able to be reported to local regulators (MAS) and Lloyd’s

Reporting to Service Company / Managing Agent needs to be detailed
enough for them to upload at a detailed level if required –or summarised for
single cover level updates

Both premium and cash items need to be processed

Need to start with the history so that all credit control can be provided and
analysis of cover performance can be complete
Six months designing the processes and solution and checked fit for
purpose
Solution: Needs people, process, system, controls,
reporting
 Skilled staff
 Quality system, flexible and
robust
 Team focus on bordereau
processing
 Agreed processes and
controls
 Full visibility of items
 Flexible to deal with different
classes
 Able to take on existing slip
history
 Easy and versatile reporting
Challenges / Surprises
Challenge: Data Format, content and quality
Brokers / cover holders have several Insurers with different data demands
they have existing systems with restrictions so can’t quickly / easily change

Solution needs to have capability to receive and process different
formats
Communicate what data is required and why (+ tax and regulatory reporting)
communicate what will reduce queries on processing / cash matching

Brokers advised that they are interested in reducing queries and
rework

Communicate what is currently good quality as well as any issues
Surprise: hard copies sent & non standard paper size – wide as the bordereaux!
Solution: Accept different formats and augment data
provided
 Easy mapping and re-mapping
 Default data from the cover when sensible
 Check against cover rules
 Check amounts and values
 Check original premium notified prior to subsequent AP /
RP
 Provide a service to scan / create bordereaux from paper
schedules
Challenges / Surprises
Challenge: Concentrate on fields that affect
Tax/Regulatory/Performance Reporting
- Check on values provided to ensure not only valid but sensible for the
business being written. Concentrate on changing details that make a
difference – risk based approach to change
Check what is reported is within the terms / as expected
- Understand cover/ binder and ensure business written adheres to the
rules
Surprise: Singapore writes business globally – lots of tax codes to
understand
Solution: Needs to be able to identify issues / potential
issues

Check tax / locations

Use experience to query / confirm items in the
bordereaux

Warnings and errors and queries all managed

Check tax values against Crystal
 Auto check against cover / binder values

Include rules for maximum lines / limits
Challenges / Surprises
Challenge: errors - check slip when written, pre cash received

Check at written stage to identify issues with data presentation / quality
- do not wait until end of month / Audit to correct poor practices
Check on servicing
some brokers appreciate regular contact to remind of due items not
just chase on overdue

Pro active communications to share with coverholders / brokers what is
expected at contract outset and then provide broker statements /
account updates support as required
Surprise: many versions of the truth – multiple copies / versions /
endorsements
Solution: Processes for operations and broker
interaction
 Diary items of due items (bordereaux due) or planned activity (issue
reports)
 Operational reports to identify large volumes / unusual items /
missing items
 Regular interaction email / call / face to face
 Management for further items on a declaration: endorsements and
additions
 Broker statements
 Account statements
 Allow for variations on engagement
 Contact from experienced
staff
Action Plan / Results - to date…
Action Plan
-Provide consistency on approach / interaction and reports.
-Implementation guide for moving others onto the solution.
-Approach to guide new cover holders to meet control framework adherence .
-Ongoing commitment to continue to improve data quantity and quality.
-Ongoing commitment to provide feedback to market and clients on binder
business.
-Support move to data feeds to reduce data rekeying.
Results – to date…
-Early days, but receiving a positive response to reducing queries and to
progressing items in a timely fashion to remove delays in cash processing
Solution: Target Operating Model
 Data cleansing
 Data checking and issue resolution
 Bordereaux and payment chasing
 Cash matching and issue resolution
 Data feeds (various levels and systems)
 Reports operational / broker / underwriter / management
 Loading of binder /cover details
 Loading of history data
Future for Singapore – available now
Provision of agreed monthly packs / flexibility of dashboards
- Reporting for performance of the account – premium written vs paid vs
expected
- Reporting for quality of the data – how many queries / endorsements
/corrections
- Reporting for servicing of the account – timely receipt of premiums / cash
- Reporting to be able to view per class / broker / cover/binder / location
- Processing reporting to show volumes / types of issues
Claims bordereaux processing
- Reporting for performance of the account – loss ratios
Solution: Analytics and Management Information
 Automatic production of
report pack
 Up to date dashboard
 Choice of content for
reports
 Views for underwriter /
management
 Focus on underwriting
not processing
Conclusions
•We do not operate in a perfect world. Expect the unexpected !
•Effective Resource + Robust System + Road Tested Solution = Managed Service
Delivery.
Audit Trails and Transparency = Control via Detailed Management Information.
Solution Encompasses Cash Management = Enables Direct Reporting.
Tax and Regulatory Reporting = Demonstrates Demands of the Control Framework
Addressed.
Business Data Feeds + Dashboards = Delivery of Business Decision Information.
< Picture to go here >
Market Relationship &
Development At Lloyd’s
Sue Baker
© Lloyd’s
27
Summary
• Background
• Market Relationship & Development – What We Do
• Our Challenges And What We Can Do For You
• Contact Details
© Lloyd’s
MARKET STRUCTURE
Corporation of Lloyd’s
Management
Coverholders
Policyholders
 Direct
200+
Lloyd’s
Brokers
55
Managing
Agents
93
Syndicates
 Reinsurance
Service
Companies*
BUSINESS FLOW
Members
 Corporate
Members
Agents
 Individual
Underwriting
CAPITAL PROVISION
SEE: www.lloyds.com/directories
Source: Lloyd’s as at 1st April 2014 * some risks are placed directly with managing agent-owned service companies
What do we do?
CRM
Database
Market Mail
Outs
Managing
Agent
Relationship
Management
Broker
Relationship
Management
Lloyd’s
Global
Development
Centre
© Lloyd’s
30
InterAction for Contact Management
Lloyd’s Have A Huge Number of Contacts
• 90,000 contacts shared by all the overseas offices
• 28K contact updates in 2013
• 22K new records added in 2013, old records removed
How We Manage Our Contacts & Broadcast Emails
• Consolidation of contact data – one single source
• Used for broadcast emails, events and projects
• DPA compliant contact data
• Proactively managed
Spreadsheets
• Managed distribution lists
Business cards
• Users informed of key contact changes
Outlook Contacts
Databases
© Lloyd’s
Broker Relationship Management
Responsible for supporting brokers through the lifecycle
The Lloyd’s Broker Lifecycle
Registration
Deregistration
Relationship
Management
We get to understand our brokers better through our broker
relationships. We can show brokers how they benchmark against
peers and maintain a dialogue through the lifecycle.
© Lloyd’s
32
Managing Agent Relationship Management
• New Entrants – application and approval for new syndicates, SPS’s and
managing agents.
Due Diligence
Step 1: :
First
approach
Specific information to
explore possibilities
Implementation
Step 2:
High
Level
Pitch
Step 3:
New
Entrant
Assessment
Group
Step 4:
Franchise
Board
Decision in
Principle
Step 4: :
Making it
Happen
Underwriting can
commence when
conditions of
approval met
High level review of
Detailed review of
plan, people, capital
plan, people, capital
reputation and value reputation and value
33
Step 6:
Business
As Usual
18 – 24 months
“heavy touch” validation
of business plan
And operations
Managing Agent Relationship Management
• On-going relationships – holistic understanding of managing
agents at Lloyd’s and the environment in which they operate
• Sounding board for new opportunities.
• Work closely with other areas of Lloyd’s and as part of
International Markets to build The Corporation’s view of
Lloyd’s businesses
• Presentations to market participants and key clients, banks,
potential capital providers and regulators.
© Lloyd’s
34
Lloyd’s Global Development Centre
• Launched in April, an initiative designed to develop, coordinate and deliver educational and network events to
promote Lloyd’s
• Building on Andrew Beasley Broker Academy, it offers
regional and London based events targeting overseas
brokers and (re)insurance buyers
© Lloyd’s
35
Our Passion and Our Challenge
• To building a holistic view of businesses working at Lloyd’s
and our key stakeholders
• To tailor our approach
• To use this view to break down the silos.
• To make Lloyd’s easier to navigate for existing business and
attractive for new business(es).
© Lloyd’s
36
What We Offer
• A first contact point
• A sounding board and discussion partner
• We can help demystify Lloyd’s
© Lloyd’s
37
Contact Details
• Susan.baker@lloyds.com
020 7327 5564
• Robert.stevenson@lloyds.com
020 7327 5541
• Nigel.williamson@lloyds.com
020 7327 6415
© Lloyd’s
38
Control Framework
Q&A
39
© Lloyd’s
Control Framework
Celebrating success
Equity Syndicate Management Limited
40
© Lloyd’s
Control Framework
Close
Further information on Control Framework – controlframework@lloyds.com
Next Breakfast Meeting – 9th September
www.lloyds.com/controlframework
41
© Lloyd’s