Implementing ACORD Standards within the London Insurance Market

What is the London Insurance Market?• A distinct part of the UK insurance industry, mainly dealing with general (non Life) insurance andReinsurance. Gross premiums written of over GBP 35 billion in 2010.• Broker driven and largely subscription based – ie risk is spread across multiple insurers.• 200+ Brokers, 100+ underwriters (80 Lloyd’s syndicates) and about 50,000 people working in thisarea, across Lloyd’s and the Companies market.• Lloyd’s of London has existed for over 320 years and accounts for about 60% of London Marketpremiums (ie GBP 22.6 billion in 2010)• Much data exchanged, and much paper!(c) TriSystems Ltd 2011 – The ACORD Messaging Experts

What does the ACORD messaging landscape look like now ...BrokerPlatform egLime-st.comInsurerPlatform egRi3KBrokerBrokerBrokerBrokerGateway Gateway GatewayThe Market ExchangeLondon (Lloyd’s)XchangingDocumentRepository(IMR)XchangingBureau –Claims(ECF)Gateway Gateway GatewayInsurerInsurerInsurer(c) TriSystems Ltd 2011 – The ACORD Messaging Experts

ACORD’s growing involvement over the years• Long history of insurance standards development in USA.• Established a presence in London (2000?) and took over the RINET / WISE standards developmentprocess, incorporating these into a common standard suitable for the Reinsurance and LargeCommercial insurance arena.• Standards advocacy and involvement with market associations (Lloyd’s, LMA, IUA, LIIBA).• Implementation support to interested parties and creation of the TCF (Testing and CertificationFacility).•Heavy involvement with the creation of the Lloyd’s Exchange (including seconding of resource).(c) TriSystems Ltd 2011 – The ACORD Messaging Experts

The pitfalls• In the early days the standards were very abstract and embryonic ...• Lack of central guidance and implementation guidance; slow take-up by the incumbent bureaux.• Different companies interpreted the standards slightly differently – worked 1 to 1 but then causedproblems when communicating with others.• Lack of ACORD skills slowed the process – far better to outsource this (buy don’t build).• Rapidly evolving standards and difficulty for participants to remain up to speed – cannot expect allparticipants to be working to the same standard versions or progress grinds to a halt.• Transactional aspect was (and remains) painful. Physical implementation most of all (firewalls, SSL,digital signatures / encryption)!• Mapping of disparate codesets between organisations is time consuming and the most likelystumbling block. Getting the common (ACORD) codesets in the middle right is critical.• Don’t try to do everything at once ... Identify small steps that add value progressively.(c) TriSystems Ltd 2011 – The ACORD Messaging Experts

The successes !• Critical Mass achieved and there is now a real drive from business to engage.• Companies have choice, not a monopoly – keeps suppliers on their toes.• Tangible benefits from lack of rekeying, ie speed and quality – benefits to insurers AND brokers.• More consistent terminology (eg Class of Business codes).• London globally accessible making it more competitive in the modern electronic age.(c) TriSystems Ltd 2011 – The ACORD Messaging Experts

Where does London go next ...• Extend ACORD messaging to all stages ofthe insurance lifecycle to make Londonfully accessible electronically.• Links with hubs/switches in othercountries to facilitate data exchangebetween different environments.• Software as a Service offerings and “lighttouch integration” to accelerate take-up bythe “second tier” companies who don’twant to invest heavily in the technology.(Don’t reinvent wheels unnecessarily).(c) TriSystems Ltd 2011 – The ACORD Messaging Experts

Conclusions• Definitely a success story overall. The adoption of electronic messaging in general is making Londonmore efficient, easier to access and a desirable destination for placing insurance/re-insurance.• Use of globally recognised standards (ACORD) strengthens the international dimension of the above• Increased credibility from a regulatory perspective due to the transparency, consistency andauditability of the data being exchanged, particularly where this is flowing through central switches.• “Commoditising” the messaging technology is a critical factor contributing to success – buy don’tbuild.• This approach will inevitably pervade all insurance markets worldwide.(c) TriSystems Ltd 2011 – The ACORD Messaging Experts

Questions ?(c) TriSystems Ltd 2011 – The ACORD Messaging ExpertsJuly 2011Alex MattelaerTechnical DirectorTriSystems Ltdhttp://www.trisystemssoftware.com