A project which hopes to increase the volume of claims being managed using the market’s electronic claims handling system ECF is under way.
The co-lead binders initiative has been described as ‘the last major piece of the jigsaw puzzle for ECF’ and should see the percentage of Lloyd’s market claims processed using ECF rise from 83% to over 90%.
The project, which is expected to move to business as usual in October, aims to allow the ECF system to handle claims made under co-lead binding authorities. A co-lead risk is one where the insured has been issued with one certificate of insurance which is then split over more than one London Market-placed binding authority. Each binding authority has its own lead underwriter, which may be in Lloyd’s or the companies market. At present these claims cannot be processed electronically and have to revert to paper files.
Currently, approximately a third of Lloyd’s premium is written via binding authorities and an estimated 30–35% of this is written on a co-lead basis. This was confirmed by a special exercise undertaken by managing agents and brokers in 2010.
Robert Gregg, chair of the ECF User Group and senior claims executive at the Lloyd’s Market Association said: “At the moment, system security constraints in ECF will not allow co-lead claims to be processed without manual intervention. This is due to the different leaders not being able to view each others’ comments on the individual claims.
“The pilot project to tackle this problem began last year with five brokers and 27 managing agents and is now approaching a calendar-year since its inception. The solution is that rather than just submitting a paper file to Xchanging for processing, brokers collect evidence that all lead underwriters have reviewed the claim and are satisfied with it and attach this evidence to the bordereau. This allows Xchanging to process the outside authority claims via ECF as part of the bordereau presentation.
“The real value of this project is that it will help boost adoption rates for ECF towards percentages in the mid-90s. This makes the co-lead binders project the last major piece in the jigsaw puzzle for ECF adoption across the market.”
Initial results of the pilot are said to be very positive and the plan is to move towards fully integrating the process into ECF at some point in 2012.
Every month, around 40,000 claims transactions are being created and completed in the London insurance market using the ECF system.
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