Lessons Learned and Looking Ahead at Lloyd’s
December is often a time of reflection on what we’ve achieved, where we’ve stumbled and what lessons we will take forward into the New Year.
When Lloyd’s published its three-year strategy earlier this year, it was clear that one of our priorities was improving access to business through coverholders. So, what have we achieved in 2010?
Coverholders are local MGAs that partner with Lloyd’s syndicates to underwrite on their behalf locally in countries all over the world. This is an incredibly important source of business to the Lloyd’s market. They allow syndicates to offer products locally within a region or country, making it a cost-effective way for Lloyd’s to underwrite smaller, higher volume business globally while also bringing the benefits of Lloyd’s to a wider customer base.
There are around 2,600 Lloyd’s coverholders globally, and 1,100 of those are in the United States. Some have been doing business with Lloyd’s for three or more generations. It is a partnership that works well for both entities.
Coverholders hold a great deal of expertise in particular products and regions and have very strong local relationships. They can be highly innovative in developing new products in partnership with Lloyd’s syndicates and Lloyd’s brokers. In return, coverholders benefit from access to Lloyd’s brand, security and ratings, as well as working with experienced underwriters and brokers.
Renewing focus
Despite the success and longevity of the coverholder model, there has been renewed focus this year to ensure its efficiency and sustainablity. It is a common misconception that Lloyd’s is difficult to access, so several initiatives have been launched to improve the experience of dealing with Lloyd’s and also improve coverholders’ access to the market.
The first area of focus has been to remove some of the mystique surrounding Lloyd’s. Our new website has been a useful vehicle to provide better guidance on dealing with the market. New content is helping to improve understanding of Lloyd’s — including a new online educational module on the London Market which soon will be CE accredited in most states. We have been working very closely on these initiatives with the Association of American General Agents (AAMGA) and National Association of Professional Surplus Lines Offices (NAPLSO) to ensure that we deliver what our US partners want in this area.
As a result of these discussions with MGAs, the market has also focused on developing consistent data standards for the risk, premium and claims information that coverholders provide to Lloyd’s syndicates and brokers. We recently announced a new premium data standard to complement the existing ACORD Risk standard, and a claims standard is due to follow in early 2011. Common data standards will make it easier for coverholders to do business with Lloyd’s and enable more effective use of technology.
This has been supported by several coverholder technology events, culminating in a forum in November where 30 vendors offering technology solutions to make coverholders’ lives easier showcased their wares to syndicates and brokers. When the new technology is combined with the other market initiatives, like the Exchange and the Electronic Claims Files, it should give coverholders a simpler and more efficient access to Lloyd’s.
To make it easier for potential clients to reach Lloyd’s international coverholder network, we launched a new directory of coverholders on Lloyds.com in November. This allows retail agents across the world to locate their nearest coverholder using simple search criteria.
We also invested in significant enhancements to our ATLAS system — an online tool that makes the process of managing coverholders faster and more efficient — which will allow coverholders to easily monitor their regulatory, audit and approval information online. This is another key step in making the lives of our coverholders easier.
It’s been a good year for improving the experience of coverholders in dealing with Lloyd’s, and feedback from MGAs in the U.S. has been very positive. But now it’s time to look ahead.
There is still a lot to do in 2011 with new online educational content under development, a U.S. coverholder event to be held in London, enhancements to the claims process, and easier-to-use marketing guidelines for coverholders to promote their Lloyd’s relationship. We better get started.