Lloyd's Chief Warns Firms Over Modernization Delays

London market leaders must accelerate the pace of electronic processing or face sanction, Lloyd's Chief Executive Officer Richard Ward has warned.

In a recent letter to managing agents, Mr. Ward said the Lloyd's Franchise Board will take “firm action where necessary” to ensure that progress is made. “The pace of change is still too slow. Improvements to the market's processes are fundamental to the ongoing competitiveness of Lloyd's market,” his message read.

The market's still relatively new CEO, who has made modernization of the paper-intensive Lloyd's market his top goal, declined to specify what action would be taken against recalcitrant managing agents.

Mr. Ward was responding to a letter sent by Market Reform Group Chairman Dane Douetil about the slow take-up of electronic processing through the Electronic Claims File and the Accounting and Settlement Repository. Both make it possible for the market to process claims, premiums and policies electronically, making the whole system faster and more efficient.

The Market Reform Group targets for accounting and settlement take-up are 40 percent by the end of the second quarter and 80 percent by the end of the year. Lloyd's current use of the accounting and settlement repository stands at just 17 percent. “This is disappointing,” Mr. Ward said.

On Electronic Claims File, the MRG has set targets of 30 percent for the second quarter and 100 percent by the end of the year. The current level at the beginning of the third quarter is 28.5 percent.

Mr. Ward stressed that while there is strong support for these initiatives from both the managing agents and leading brokers in London, failure to improve processes is a significant risk to Lloyd's efficiency, ratings and reputation. “We cannot miss this opportunity to modernize,” he said.