23 May 2006 – In his first letter to the market, Lloyd�s Chief Executive Richard Ward has set out proposals to streamline the way insurance contracts are checked, produced and issued.
The changes, which follow consultation with the market, will lead to a better overall service for customers, and shorten the often lengthy process for ensuring the quality of insurance contracts.
An updated set of standards will be published in the summer so that every Lloyd�s managing agent knows exactly what is needed of each contract to ensure that it is complete and meets all requirements.
The number of checks is also being reduced to ensure that they are all directly relevant and appropriate. The current number of checks is about 170 per slip, but these reforms are expected to reduce that by more than half.
This will help managing agents and brokers in completing all the relevant checks before the contract is signed and finalised.
In his letter to the market, Dr Ward said: �It is pleasing to see good progress in the market towards achieving contract certainty � the average managing agent assessment of their achievement in April was 80%.
�However, I have been considering with leading market businesses and my senior team how best to drive reform of the placing process harder, in support of both the contract certainty target and wider process efficiency.�
He said that Lloyd�s wanted to agree a timetable for implementation by the middle of this June, enabling pilot schemes for specific classes of business to start at the beginning of July.
The G6 group of Lloyd�s managing agents � Beazley, Catlin, Hiscox, Wellington, Kiln, and Amlin – is working together to modernise the market. The group is carrying out a pilot of a new approach to contract checking.
Jonathan Matthews, Beazley Underwriting Risk Manager and G6 project leader, said: “This is a ground-breaking proposal which will revolutionise the way insurance contracts are checked and placed. By focusing on a smaller number of the most critical checks, we can speed up the process and empower agents to either carry out the checks in-house or outsouce to a third party, for example XIS.”
The Lloyd�s Market Association (LMA) has also welcomed the move. In an open letter to Dr Ward, LMA Chairman Andrew Kendrick said: �The LMA has been carrying out an exercise to identify the market�s view on the future model for checking, producing and issuing contract documentation in the new era of contract certainty at inception.
�Our conclusion matches the model you describe in your letter and we support the line you are taking.�
Lloyd’s is the world’s leading insurance market providing specialist insurance services to businesses in over 200* countries and territories. In 2005, 62** syndicates are underwriting insurance at Lloyd’s. For more information, visit www.lloyds.com