5 minute read
Claims technology
Upgrade time
Technology kept London claim payments flowing during lockdown, but it’s time for an upgrade. Antiquated systems need replacement. Cross-market input into the design of a single solution will be key to its success argues David Jones, Divisional Claims Director, Marine at leading London broker Ed.
It is often said that technology saved the London insurance market during Covid lockdowns. Invariably that talk is about systems supporting placement, including PPL, and popular third-party or broker systems like Whitespace and our own TradEd. Technology also came to the rescue of claims – the part of insurance that clients really care about – but here the market relied on old systems. In tech terms, they’re positively geriatric.
London’s company market insurers had claims technology back in the 1980s. ‘CLAMS’ and ‘ELASS’ were merged in the 1990s to create the Claims Loss Advice and Settlement System (CLASS), a data storage platform which still provides the backbone of London claims IT.
About twenty years ago Lloyd’s and the IUA began working on digital claims processing. They launched Electronic Claims Filing (ECF) in 2004, upgraded it in 2011, and introduced ECF Write Back in 2019, which allows carriers (but not brokers) to use ECF from within their own systems. Now ECF is used for more than 95% of Lloyd’s claims, and 85% of company-market claims.
The system works. It kept the indemnities flowing during lockdown, and, because we’ve had ECF and CLASS for so long, claims practitioners were already more geared to electronic dealing than our colleagues on the placing side.
UPDATE NEEDED
Although they work, London’s claims management systems need updating, crisis or no crisis. For one thing,
Lloyd’s is now talking about the introduction of a brand-new system for claims. In its Blueprint 2 plan for market modernisation, Lloyd’s said: “We will deliver a platform that will lead to a seamless customer experience designed to meet their expectations.”
although they’re united in theory, in practice we must enter each and every cross-market claim separately for each bureau, into loosely linked, discrete processing systems. That increases the chances of error and wastes huge amounts of time.
London suffers another issue. Once a claim is agreed, the broker must wait three days for the indemnity payment to arrive in the relevant bank account. I have sometimes received settlements from following markets located overseas before the money has arrived from the London lead, that may be located just around the corner.
That’s crazy. Payment time is critical to compete with markets around the world. In practice, placement decisions by retail buyers are typically price-driven. But when our clients are other insurance professionals, they notice such differences, since their clients are likely to blame them for any delay.
Happily, Lloyd’s is now talking about addressing these challenges through the introduction of a brand-new system for claims.
In its Blueprint 2 plan for market modernisation, Lloyd’s said: “We will deliver a platform that will lead to a seamless customer experience designed to meet their expectations.
David Jones, Ed.
Straightforward claims will be resolved automatically (or with limited manual touch points). More complex claims will be supported by greater use of collaboration and workflow solutions. All claims will be supported by better data driven from placement as well as by a suite of centralised support functions. The key to delivery will be a new claims platform to replace the existing ECF platform. This new platform will be available to support the whole London market.”
The last point is key. For any efficiency gains to be realised in marine claims, the company market must have not only access to a new claims platform, but the desire to use it.
VITAL CONSENSUS
That means the input of the companies will be required from the initial stages of development, but that’s bound to be a challenge. Reaching agreement even within Lloyd’s alone always seems to involve protracted discussion, let alone when the company markets, with their multiple different perspectives, are brought into the mix. But this it is vital for success.
The time needed to gain consensus may lengthen, but company market involvement in development is essential if all London risk carriers are to use the same claims infrastructure. Brokers should have their say too. If the universal London market goal of cost reduction is to be achieved in the area of claims, brokers surely should be able to deal with all the syndicates and company markets in one go.
The point about replacing the ECF platform is also crucial. The technology at its core is very old. It has been bolted-onto and patched-over again and again.
It is time to start from scratch with hands-on claims people – including brokers – leading the development of that process, rather than business managers and consultancy firms informed by consultation responses. We should at very least have input on functionality, since we have some hands-on experience in this area. With Ed’s in-house systems, for example, we’ve been using electronic claims files internally for more than a decade.
The Lloyd’s Market Association (LMA), for one, has done great work to advance the cause of claims modernisation in London. Gemini, its claims-experts management and settlement platform, has created the potential for much greater efficiencies in the relationships between syndicates and adjustors, surveyors, solicitors, and other experts. Similarly, colleagues involved in binder business have spoken well of the LMA’s work on DA claims.
That progress makes me optimistic, but I have seen claims get left behind before. The success of ECF in getting London through lockdown must not be viewed as an endorsement of inaction. Any other areas of technological improvement we may implement are worthwhile too. But developing a claims infrastructure which is truly world-leading and marketinclusive will have the most important impact of all: happier customers.
