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Control Framework
A warm Welcome to
the June market Breakfast
Group
Control Framework
Breakfast Group agenda
9:00 Arrival, breakfast & networking All 9:15 Welcome Ali Dove 9:20 Phase II project update Jaana Rouvari
9:40 Bordereau management and Ness Macintosh Control Framework & Linda Stannard,
Capita
10:00 Lloyd’s Relationship Management Sue Baker
10:15 Q & A All
10:30 Celebrating success & Close Ali Dove
© Lloyd’s
Control framework Phase II
update by Jaana Rouvari
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Control Framework
© Lloyd’s
Market progress against milestones
Control Framework
Agree broker/coverholder communications & assess risks, identify controls and gaps5.
7. Agree assurance to be shared with Lloyd’s
8. Formal sign off
6. Evidence remediation plan
1. Initial meeting with Lloyd’s & Project resources in place
2. Verify CH in phase II & risk ratings completed
3. Audit plan for high risk CH in place & project delivery timeline confirmed
4. Agreed plan/deliverables for up to end of 2014
Milestones 100% completed
Completed
In progress
Not started
© Lloyd’s
Flexing the approach to suit the risk profile
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Control Framework
Xchanging Managing agent
Coverholdersystems
Broker
Auditor
Data from start to end
Raw information
Validate
© Lloyd’s 6
Control Framework
Flexing the approach to suit the risk profile
Last date of audit +1) Full audit?
2) Light touch cut down scope?
3) Desk based review?
What other ways you have flexed your approach?
Discuss around your tables – 5 minutes
Please leave us your feedback to share with others!
Risk profile
=
© Lloyd’s
Managing Agents – What do you need to be thinking about?
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Control Framework
• Talk to your brokers!
• The team at Lloyd’s is here to help you, we can:
- Centrally share your risk ratings with your brokers
- Introduce you to our control framework broker contacts
© Lloyd’s
Brokers – What should you be thinking about
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Control Framework
Do you need to enrich data received from coverholders?
If you need to manually enrich data, can you evidence the processes and controls you have in place?
If you have automated systems/ controls, can you share how these work?
If you have binders in multiple business units, can you evidence processes and controls for each division?
Remember, coverholder ratings are based on tax and regulatory risk, they do NOT indicate a good vs. bad coverholder
© Lloyd’s
Support available for Brokers
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Control Framework
• Get a flavour of where to concentrate, talk to the Lloyd’s project team!
• Who should we be talking to? Make sure the Lloyd’s team has the right contact details for your company to streamline communications
• Find out from the Lloyd’s team the right people at managing agents to talk to
• Put yourself in the driving seat and be proactive!
How to get started? – Some great examples of what your peers have done
© Lloyd’s
New stuff
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Control Framework
Martin Baker – Stakeholder Manager
New FAQ online regarding run off business
New broker content coming online soon!
Control Framework Breakfast
Bordereaux Management and the Control FrameworkLessons Learnt – June 2014
Listen Create Deliver
A journey into the unknown – and using the lessons learnt to create a complete Binder solution
Agenda:
1. Introduction
2. DVD
3. Objectives
4. Challenges / surprises / solutions
5. Action Plan / Results – to date…
6. Future
7. Analytics
8. Conclusions
Binder Management Services (Video clip)
http://www.youtube.com/watch?v=caWxR2fBrxQ&feature=youtu.be
Singapore Objectives
‘Provide a solution to capture and monitor schedules and bordereaux in Singapore so that credit control can be performed and reported on at the detailed schedule / declaration level’
Remembering that:
Items need to comply with control framework
Items need to be able to be reported to local regulators (MAS) and Lloyd’s
Reporting to Service Company / Managing Agent needs to be detailed enough for them to upload at a detailed level if required –or summarised for single cover level updates
Both premium and cash items need to be processed
Need to start with the history so that all credit control can be provided and analysis of cover performance can be complete
Six months designing the processes and solution and checked fit for purpose
Solution: Needs people, process, system, controls, reporting
Skilled staff Quality system, flexible and
robust Team focus on bordereau
processing Agreed processes and
controls Full visibility of items Flexible to deal with different
classes Able to take on existing slip
history Easy and versatile reporting
Challenges / Surprises
Challenge: Data Format, content and quality
Brokers / cover holders have several Insurers with different data demands
they have existing systems with restrictions so can’t quickly / easily change
Solution needs to have capability to receive and process different formats
Communicate what data is required and why (+ tax and regulatory reporting)
communicate what will reduce queries on processing / cash matching
Brokers advised that they are interested in reducing queries and rework
Communicate what is currently good quality as well as any issues
Surprise: hard copies sent & non standard paper size – wide as the bordereaux!
Solution: Accept different formats and augment data provided
Easy mapping and re-mapping Default data from the cover when sensible Check against cover rules Check amounts and values Check original premium notified prior to subsequent AP /
RP Provide a service to scan / create bordereaux from paper
schedules
Challenge: Concentrate on fields that affect Tax/Regulatory/Performance Reporting - Check on values provided to ensure not only valid but sensible for the business being written. Concentrate on changing details that make a difference – risk based approach to change
Check what is reported is within the terms / as expected
- Understand cover/ binder and ensure business written adheres to the rules
Surprise: Singapore writes business globally – lots of tax codes to understand
Challenges / Surprises
Solution: Needs to be able to identify issues / potential issues Check tax / locations Use experience to query / confirm items in the
bordereaux Warnings and errors and queries all managed Check tax values against Crystal Auto check against cover / binder values Include rules for maximum lines / limits
Challenge: errors - check slip when written, pre cash received
Check at written stage to identify issues with data presentation / quality - do not wait until end of month / Audit to correct poor practices
Check on servicing some brokers appreciate regular contact to remind of due items not just chase on overdue
Pro active communications to share with coverholders / brokers what is expected at contract outset and then provide broker statements / account updates support as required
Challenges / Surprises
Surprise: many versions of the truth – multiple copies / versions / endorsements
Solution: Processes for operations and broker interaction
Diary items of due items (bordereaux due) or planned activity (issue reports)
Operational reports to identify large volumes / unusual items / missing items
Regular interaction email / call / face to face Management for further items on a declaration: endorsements and
additions Broker statements Account statements Allow for variations on engagement Contact from experienced
staff
Action Plan
-Provide consistency on approach / interaction and reports.
-Implementation guide for moving others onto the solution.
-Approach to guide new cover holders to meet control framework adherence .
-Ongoing commitment to continue to improve data quantity and quality.
-Ongoing commitment to provide feedback to market and clients on binder
business.
-Support move to data feeds to reduce data rekeying.
Results – to date…
-Early days, but receiving a positive response to reducing queries and to
progressing items in a timely fashion to remove delays in cash processing
--
Action Plan / Results - to date…
Solution: Target Operating Model
Data cleansing Data checking and issue resolution Bordereaux and payment chasing Cash matching and issue resolution Data feeds (various levels and systems) Reports operational / broker / underwriter / management Loading of binder /cover details Loading of history data
Provision of agreed monthly packs / flexibility of dashboards
- Reporting for performance of the account – premium written vs paid vs expected
- Reporting for quality of the data – how many queries / endorsements /corrections
- Reporting for servicing of the account – timely receipt of premiums / cash
- Reporting to be able to view per class / broker / cover/binder / location
- Processing reporting to show volumes / types of issues
Claims bordereaux processing
- Reporting for performance of the account – loss ratios
Future for Singapore – available now
Solution: Analytics and Management Information
Automatic production of report pack
Up to date dashboard Choice of content for
reports Views for underwriter /
management Focus on underwriting
not processing
Conclusions
•We do not operate in a perfect world. Expect the unexpected !
•Effective Resource + Robust System + Road Tested Solution = Managed Service Delivery.
Audit Trails and Transparency = Control via Detailed Management Information.
Solution Encompasses Cash Management = Enables Direct Reporting.
Tax and Regulatory Reporting = Demonstrates Demands of the Control Framework Addressed.
Business Data Feeds + Dashboards = Delivery of Business Decision Information.
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< Picture to go here >
© Lloyd’s 27
Market Relationship & Development At Lloyd’sSue Baker
© Lloyd’s
Summary
• Background
• Market Relationship & Development – What We Do
• Our Challenges And What We Can Do For You
• Contact Details
Policyholders
Direct
Reinsurance
55 Managing
Agents
Management
93Syndicates
Underwriting
BUSINESS FLOW CAPITAL PROVISION
Members Agents
Members
Corporate
Individual
Corporation of Lloyd’s
SEE: www.lloyds.com/directories
200+Lloyd’s Brokers
Service Companies*
Coverholders
Source: Lloyd’s as at 1st April 2014 * some risks are placed directly with managing agent-owned service companies
MARKET STRUCTURE
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What do we do?
CRM Database
Market Mail Outs
Managing Agent
Relationship Management
Lloyd’sGlobal
Development Centre
Broker Relationship Management
© Lloyd’s
Spreadsheets
Business cards
Outlook Contacts
Databases
How We Manage Our Contacts & Broadcast Emails• Consolidation of contact data – one single source• Used for broadcast emails, events and projects• DPA compliant contact data• Proactively managed• Managed distribution lists• Users informed of key contact changes
InterAction for Contact Management
Lloyd’s Have A Huge Number of Contacts• 90,000 contacts shared by all the overseas offices• 28K contact updates in 2013• 22K new records added in 2013, old records removed
© Lloyd’s 32
Registration
Relationship ManagementDeregistration
The Lloyd’s Broker Lifecycle
Broker Relationship ManagementResponsible for supporting brokers through the lifecycle
We get to understand our brokers better through our broker relationships. We can show brokers how they benchmark against peers and maintain a dialogue through the lifecycle.
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:
Due Diligence Implementation
Step 6: BusinessAs Usual
18 – 24 months“heavy touch” validation
of business planAnd operations
Step 4::Making itHappen
Underwriting can commence when
conditions of approval met
Step 4:Franchise
Board Decision inPrinciple
Step 3:New
EntrantAssessment
Group
Detailed review of plan, people, capital
reputation and value
Step 2:High LevelPitch
High level review of plan, people, capital
reputation and value
Step 1:First
approach
Specific information to explore possibilities
• New Entrants – application and approval for new syndicates, SPS’s and managing agents.
Managing Agent Relationship Management
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Managing Agent Relationship Management
• On-going relationships – holistic understanding of managing agents at Lloyd’s and the environment in which they operate
• Sounding board for new opportunities.
• Work closely with other areas of Lloyd’s and as part of International Markets to build The Corporation’s view of Lloyd’s businesses
• Presentations to market participants and key clients, banks, potential capital providers and regulators.
© Lloyd’s 35
Lloyd’s Global Development Centre
• Launched in April, an initiative designed to develop, co-ordinate and deliver educational and network events to promote Lloyd’s
• Building on Andrew Beasley Broker Academy, it offers regional and London based events targeting overseas brokers and (re)insurance buyers
© Lloyd’s 36
Our Passion and Our Challenge
• To building a holistic view of businesses working at Lloyd’s and our key stakeholders
• To tailor our approach
• To use this view to break down the silos.
• To make Lloyd’s easier to navigate for existing business and attractive for new business(es).
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What We Offer
• A first contact point
• A sounding board and discussion partner
• We can help demystify Lloyd’s
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Contact Details
• [email protected] 020 7327 5564
• [email protected] 020 7327 5541
• [email protected] 020 7327 6415
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Q & A
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Control Framework
© Lloyd’s
Celebrating success
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Control Framework
Equity Syndicate Management Limited
© Lloyd’s 41
Control Framework
Close
Further information on Control Framework – [email protected]
Next Breakfast Meeting – 9th September
www.lloyds.com/controlframework
