London Market Expanding Endorsement Revamp

The London Market Reform Group (MRG), the senior body involved with market modernization initiatives, is expanding on a new system to speed up the endorsement process, brokers said.

In the London Market there are currently, on average, three endorsements for every contract and each endorsement must be evidenced in writing and agreed face-to-face, making it one of the most time-consuming areas of work within the sector.

Willis Group Holdings, insurance brokerage has been leading and managing a key project to address the issue–a marketwide endorsements pilot using e-mail–since May of this year.

The pilot has been so successful that the MRG recently asked Willis to take the lead on transitioning this project to a phased marketwide roll out.

David Margrett, chairman and chief executive officer, Willis Limited, commented on the rationale of the initiative: “Our clients and others in the market have a perception that brokers and insurers spend a disproportionate amount of effort and cost on managing endorsements. They would prefer that investment goes into quicker settlement of claims and faster issuance of policies.”

He noted that on behalf of the MRG, Willis is allocating time and resources to head up the endorsements project to improve client service across the London Market.

David Hough, executive director, London Market Insurance Brokers' Committee (LMBC), explained that the goal of the cross-market team is to reduce the “time and effort spent on agreeing endorsements by streamlining the process and providing a structured framework that can be used for e-mail as an interim stage as the market moves toward full electronic trading.

“It should also align London and international practices into a common process,” he said.

The brokers said that to facilitate the use of electronic transmission, the project team piloted a new endorsement layout which follows the recently introduced market reform contract standard.

A standard e-mail structure also has been drawn up. These, together with the Market Reform Contract Endorsement Implementation Guide and Endorsement Code of Practice, will form the basis of the initiative, according to Willis.

The new endorsement layout is intended to be published and optionally available this fall. The new e-mail distribution method also may be used, again optionally, from the same date.

The project board responsible for implementing the changes draws representation and expertise from other major London brokers, active underwriters, the London Market Brokers' Committee, the Lloyd's Market Association, the International Underwriters Association, the Market Reform Program Office and ACORD, Willis said.