Lloyd s Claims Management Multiple Dimensions - A Single Objective Phil Godwin, Senior Claims Manager 9 June 2011
Content Claims in context Performance Management Framework Catastrophe Response The Claims Process today Transforming the Future On the Radar 2
US Claims In Context Value Bands Low Value Band Frequency Evident 3
US Claims in Context Open Claims by COB Casualty & Property Insurance Claims Dominant 4
Performance Management Framework A highly regulated market: Regulated by the Financial Services Authority Lloyd s Corporation regulates the Lloyd s market via: Council of Lloyd s Lloyd s Franchise Performance Board Underwriting & Claims Standards Framework Performance Management Directorate Directorate exercising powers approved by the Council 5
Performance Management Framework Lloyd s requires all Managing Agents adhere to a minimum of : Eight Lloyd s Claims Management Principles Forty One individual claims Standards Enhanced Standards effective January 1st 2012 Lloyd s Performance Management Directorate: ensures adherence provides market leadership protects the Lloyd s brand Standards are a minimum not a maximum 6
Principles Framework Claims culture: embedded claims focus from top to bottom Training & development: appropriate skills & resources Proactive processes: efficient, timely claims handling Documentation: appropriate audit trail Reserving: consistent, timely, accurate Expert management: disciplined & proactive management Performance measurement: appropriate, regular Information sharing: co-operative claims agreement process Enforceable & Applicable to every Managing Agent 7
Where are Lloyd s Claims Handled Triggers for Local Handling Triggers for London Handling Lower value/high volume claims Higher value claims Sufficient local skill Complex claims Outsourcing risk is not material Insufficient local skill Cost effective, good for the Where delegation is a material customer risk Both approaches reflect what the customer wants 8
Delegated Claims Management Framework Ground Rules: High standards of due diligence pre-contract Clearly documented agreements/authorities Effective audit programmes/oversight The risk multiplies as trading relationships terminate Actively case manage to complete closure Loss Funds: Immediate access to settlement monies Balance reduced over time Residual monies reclaimed ultimately 9 A Key Mechanism for Efficiency and Key Area for Risk
Catastrophe Response Corporation CAT Steering Group deployed Multi Disciplinary Group Gathering Situational Intelligence Directing & Advising Market CAT co-ordination group: Provide Leadership Establishing Task Forces Identifying challenges and solutions Lloyd s Local Network Country & Regional Managers 10 Established & Consistently Proven Track Record
Claims Sector Groups LMACC Lloyd s Market Association Claims Committee CSRB Claims Service Review Board FIPI Financial & Professional Lines Claims Group LRCG Lloyd s Reinsurance Claims Group BACG Binding Authority Claims Group LMECG Lloyd s Market Energy Claims Group Cat Co-Ordination Group Cross Market Group Significant Expertise in a Single Market in a Single Location 11
The Present Claims Process Policyholder notifies claim Retail broker Expert advisors Coverholder/ TPA Lloyd s broker Lloyd s Leader Transformation Programme Xchanging Claims Services agrees claims on behalf of following market 12 Following Market
Transforming the Future Claims Transformation Programme Enhance Lloyd s reputation for fast and fair claims handling To deliver: Faster transaction times Faster settlements Via a programme of strategic & tactical activities Improved customer service Easier Market Access Choice Enhanced communication 13
Phase 1 & 2 Pilot Subscription policies w.e.f.1.4.2006 ECF claims i.r.o policies issued on four COB w.e.f 1.1.2010 & 1.7.2011 2 1 XCS (on behalf of following syndicates) Lead Syndicate Segmentation rules determine agreement party (s) Incoming Claim Incoming Claim 14
Pilot Claims Agreement Parties Incoming Claim + Second 5,000,000 + + Second 100,000-5,000,000 Leader 100,000 15
Pilot Results So Far All data at 30 April 2011: Total claims in scope: 6,422 Standard Claims 20% improvement in speed for Leaders 60% improvement in speed for XCS Average end to end transaction times improved by 50% Concept Proven by Results, Pilot expanded at July 1st 16
Talent Initiative Fifty Professionals over 5 years Graduate Programme Market Personnel Provide fundamental understanding of insurance principles with core focus on claims Utilisation of variety of development methods, including hands-on experience 4 x 3-month Placements Lloyd s Broking House Managing Agency Law Firm / Loss Adjuster 12 month programme Two Five years claims handling experience Participants alternate between formal training at Lloyd s, mini market placements (~2 weeks) and project work Modular approach: Lloyd s/the Market Legal Aspects of Claims Handling 17
On The Radar Cat Management Projected Settlements Medicare Delegated Claims Management Adjuster Capacity Talent Case Strategy Portfolio Reviews Multiple Dimensions, One Objective 18
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