On 30th September Lloyd’s of London published their vision for the Future at Lloyd’s. Here at r10, we have undertaken a detailed study of the contents of Blueprint One and in the fourth instalment of our review, we look at the proposals for the claims solution and how it may impact your business.
What are the Claims Solution Proposals?
Lloyd’s intends to make the claims service offered by the market a positive differentiator. They intend to implement a solution that will transform the claims process by: –
- Automating and providing straight-through processing for simple, low-value claims.
- Providing, a market claims service for the handling of non-complex claims.
- Empowering lead underwriters to handle the most expensive claims on behalf of followers.
Why is it needed?
Lloyd’s has built a strong reputation for paying valid claims, which is underpinned by the availability of the central fund. The current claims process can be convoluted and bureaucratic and there is a need to deliver an improved transparent, faster, more efficient claims service to the benefit of policyholders and market practitioners alike.
So, how will it work?
Lloyd’s identified in its Prospectus document that nearly half of all claims handled have a value of less than £5,000 and over three quarters are less than £50,000.
By automatically triaging incoming claims at the point of FNOL, Lloyd’s will be able to route claims into the most appropriate workflow.
To enable this, Lloyd’s will provide a new technology platform, data standards and API’s that will: –
- Have a multi-channel claims interface, enabling Clients and Brokers to report losses and upload relevant materials in a standardised format, via API’s from existing systems or via a portal which can be white-labelled.
- Automatically triage reported losses and allocate the most appropriate workflow.
- Store uploaded data and materials in a secure central repository, allowing access by authorised parties ensuring a single version of the truth. This data may be augmented by third-party data sources curated by Lloyd’s and used to deliver added value, such as forecast reserving and fraud analysis.
- Use smart workflows and market-wide claims messaging and API’s to accelerate claims processing, and efficiently co-ordinate responses to major events.
- For “simple” claims use AI and Machine Learning to facilitate straight-though processing
- For “non-Complex” claims use a central market claims service, providing consistency and efficiency.
- For “complex” claims empower Lead Underwriters with greater authority to act on behalf of the market. Lloyd’s will provide Leads with tools to assist them in their decision making.
All subscribing parties to losses will have access to their relevant data and Lloyd’s will provide complex analytics on loss outcomes to the market. The triage process will be flexible, enabling risks to be allocated alternate workflows, should they prove to be more, or less complex as they mature.
Over time the new claims solution will replace today’s ECF platform and new services, such as an “event observer” capability will be developed. At this stage, there are no plans to migrate existing losses to the new platform.
It’s important to note that, as with all the Future at Lloyd’s initiatives there are significant dependencies on the availability of data. The data-first direction of the complex risk placing platform and the standards utilised in the risk exchange proposals will be key to enabling the triaging and automated handling of claims in the future.
What will the timeline be?
A staged delivery is planned over four phases:-
After an initial six-month transition phase, to mobilise, the first stage will be to implement targeted improvements to the existing landscape and pilot some of the longer-term changes by the end of 2020. Later phases will build on the pilot and deliver benefits in an agile, iterative manner.
How will the new claims solution impact your business?
Clearly, all market participants will be affected by the new claims solution. Clients will benefit from greater transparency the claims portal will provide. Brokers, however, may find their obligation to provide accurate, codified data throughout the lifecycle of a risk may prove challenging for some and require investment in skills and technology.
For carriers, the impact of the claims solution will be closely linked to the proposals to change the way risks are syndicated in the future.
All market participants will need to carefully discuss the Future at Lloyd’s programme changes with their technology suppliers.
How r10 can help
With our in-depth London Market expertise, r10 is uniquely placed to help guide your organisation through the Future at Lloyd’s change programme. Over the coming weeks will continue to update our blog with insights & guidance on what the changes may mean for you.
Please get in touch for more information on how r10 will help you prepare to play your part in the market of the future.
Read the next bite-sized article in our Bite-sized series “What are the Capital Solutions Proposals?”, which is the fourth out of the twelve proposed Future of Lloyd’s capabilities.
Author: Chris Carney