Delegate claims reinvented | Advent Claims

TOWARDS A MARKET-WIDE DA SOLUTION

London is increasingly reliant on delegated authority, but the challenges of moving data between all the players in the chain are becoming a serious impediment to DA’s continued profitability. Costs and competition are bearing down, even as old reporting systems creak under the strain of ever-increasing data requirements. The solutions won’t be achieved by patching up existing infrastructure. Revolutionary thinking is required.

One challenge to overcome is the diversity of needs. While London markets may all require basically the same data in a similar format, each of the MGAs, MGUs, and TPAs from dozens of jurisdictions has specific data needs and must meet divergent regulatory requirements. How, for example, is the size of a house measured? Is it bedrooms, metres, or maybe square footage? Such differences of practice make the goal of straight-through processing more difficult to achieve, since coverholders must have a system that suits their specific geography, class of business, and their customers.

The result of this divergence has been the creation of multiple systems. To gain real value by simplifying reporting processes, an interface is needed that will make these divergent coverholder systems smoothly interoperable between coverholder, broker, and carrier. As London searches for data standardisation, we must not efficiency-away essential details and functionality for our producers. Nor can we continue to shovel the burden of data collection and reporting onto their plates.

We need to find a DA solution which is workable for everyone, and the time to do it is now. More and more London market carriers are desperate for ways to make coverholder business more efficient. As the need to pare operating costs becomes more urgent, many are developing or implementing new in-house DA systems (or they had planned to, before HIM hit). Although they will be a great step forward, these disparate systems will not comprise a comprehensive solution. Most of the players now agree that a market solution is required.

That demands a new model, which in turn will necessitate fundamental changes to the way we manage DA business. It will have two components. First is the creation of a standardised London DA platform for the management and sharing of underwriting, premium, and claims data. Errors would be flagged for attention at their source, even as the system draws out all the information required by London’s central systems using a straight-through processing approach. Funded by carriers or brokers, not by coverholders, it would make the latter more successful (because it would be far more efficient in areas like settlement) and would cheaply collect the data London needs.

The system is called Advantage. Our clients are already using it.

The second phase is the creation of a parallel, hybrid system that will meet all the markets’ requirements and will dovetail with existing market systems. Binder rules would be disseminated into established market systems quickly and easily through one-off interface tools to allow real-time risk, policy and claims validation. Coverholders who do not wish to use a new system would be provided with a plug-in that leads to the same ends.

We haven’t quite finalised that system yet – but we’re working on it.

By Paul Bermingham, director, Advent Insurance Management