The 2010 Claims Scheme: 100, 000 claims later

Claims, Insurance and Reinsurance, Marine Insurance — By on January 17, 2014 at 9:58 PM
David Lang

David Lang

17 January 2014 –  The Lloyd’s market has received the 100, 000th claim in scope of its new streamlined claims agreement process (the 2010 Claims Scheme). David Lang, Head of Claims at Lloyd’s, believes this milestone is an opportunity to reflect both on how much the Claims Transformation Programme (CTP) has achieved and on planned future developments. (source: Lloyd’s of London)

What is the CTP?

In 2009 the Lloyd’s Franchise Board approved the market’s claims strategy, which sets out to transform the way the market handles claims to enhance the experience of the customer. In order to achieve this objective Lloyd’s is investing £20m in claims processes and systems over five years. The claims strategy is being implemented via the CTP, of which I consider the key component is the streamlined 2010 Claims Scheme.

Through enhancing the experience of the customer, the CTP aims to make the market more competitive in its service on standard claims and maintain its competitive advantage in complex claims handling. Achieving these aims is expected to contribute to Lloyd’s overall strategy to be the market of choice for (re)insurance buyers and sellers to access and trade specialist property and casualty risks.

What were the main changes that the 2010 Claims Scheme has brought about?

The 2010 Claims Scheme provides a streamlined claims agreement process for subscription market claims. In the new process, standard claims (typically less than £250, 000 and relatively simple in nature) are handled by one agreement party only. Larger and more complex claims are now agreed by the leading and second Lloyd’s syndicates on the policy on behalf of the whole market. This both simplifies and speeds up the process for policyholders and their brokers and increases the scope for differentiation on claims service between managing agents.

What do you consider to be the key benefits of the 2010 Claims Scheme?

The three principal success criteria for the CTP are speed, quality and market perception. Specifically, the 2010 Claims Scheme was required by the Franchise Board to achieve a minimum 25% reduction in the duration of transactions on the Electronic Claims Files (ECF) system while maintaining the quality of claims handling and the perception of the market’s claims service.

To date, a 53% improvement in transaction time has been achieved, while the quality of claims handling has increased. In terms of market perception, according to Gracechurch Consulting’s 2013 Claims Performance Monitor report, the 2010 Claims Scheme was rated by 87% of brokers surveyed as the same or better than the previous system – four years after the start of its roll-out to different classes of business in January 2010.

When is it anticipated that all claims will be brought into scope of the 2010 Claims Scheme?

All new electronic claims on policies incepting on or after 1 July 2012 are already being handled as CTP claims under the 2010 Claims Scheme. In order to fully achieve the customer service benefits of CTP, Lloyd’s is now expanding the scope of the 2010 Claims Scheme to the remaining subscription market claims not already included.

This follows a recommendation from the Claims Implementation Board, representing managing agents, which has concluded that the project has continued to exceed its agreed success criteria.

As of 31 December 2013 Marine and Energy CTP Claims are now in scope of the 2010 Claims Scheme. This conversion will bring an estimated 15, 000 additional claims into CTP during the course of 2014.

Furthermore, the project team is implementing an optional scanning service to convert certain legacy paper files to ECF. The conversion of these paper files to ECF is designed to allow the claims to enjoy the additional benefits of the electronic platform.

The timetable for the completion of legacy implementation is yet to be finalised but the process is anticipated to be completed before the end of 2015.

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