London Insurance Market Placing Process - London Market Group
London Insurance Market Placing Process - London Market Group
London Insurance Market Placing Process - London Market Group
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<strong>Placing</strong> process - Page 1 (includes: submission, indicative quote and firm quote)<br />
James Tranter. MRPO, 020 7327 6605<br />
Client<br />
& Producing Broker<br />
Start<br />
Request<br />
indicative quote<br />
Review<br />
indicative quotes<br />
Accept?<br />
Start<br />
Request firm<br />
quote<br />
Propose new<br />
terms/resolution<br />
of issue<br />
Action?<br />
Client reviews options e.g. approach<br />
<strong>London</strong> insurers again, go to other<br />
markets, self-insure, amend<br />
deductible, increase retention etc.<br />
Do not<br />
progress<br />
Yes<br />
Review firm<br />
quotes/terms<br />
offered (incl.<br />
subjectivities*)<br />
No<br />
Accept?<br />
Negotiation<br />
possible?<br />
Yes<br />
No<br />
Accept?<br />
Yes<br />
A<br />
(pg1 to pg2)<br />
No<br />
Decline firm<br />
quotes<br />
No<br />
Client reviews<br />
options e.g.<br />
approach<br />
<strong>London</strong><br />
insurers again,<br />
go to other<br />
markets, selfinsure,<br />
amend<br />
deductible,<br />
increase<br />
retention etc.<br />
No<br />
Yes<br />
Bureau Follower Leader <strong>London</strong> Broker<br />
<strong>Process</strong> followed<br />
for each leader<br />
Prepare<br />
submission for<br />
indicative quote<br />
(e.g. quote slip)<br />
(Re) Select<br />
leader(s) and<br />
present<br />
submission<br />
Review<br />
submission<br />
Provide<br />
indicative<br />
quote?<br />
Note: May involve<br />
splitting placement<br />
into separate risks<br />
Communicate<br />
decline to broker<br />
No<br />
Yes<br />
In Scope:<br />
- Open <strong>Market</strong> new business and competitive renewals<br />
- client-initiated endorsements<br />
Prepare & present<br />
indicative quote(s) to<br />
client<br />
Provide<br />
indicative quote<br />
(price & terms)<br />
NOT In Scope (there will be more!)<br />
- Binder authority agreements<br />
- Risks placed under binding authority master agreements<br />
- Line slips<br />
- Declarations off line slips<br />
- Marine cargo covers<br />
- Business placed via a service company<br />
- Global placements<br />
- insurer/broker-initiated Endorsements<br />
- Non-competitive renewals (and where ‘automatic’)<br />
- Premium adjustments (automatic)<br />
- Treaty balance processing<br />
- Use of electronic placing/accounting not directly reflected<br />
- Deferred premiums (installments)<br />
Yes<br />
Communicate<br />
decline to<br />
insurer<br />
Revise<br />
quote?<br />
No<br />
End<br />
Note: Flows assume<br />
implicitly that right and<br />
full information<br />
provided first time<br />
from party to party<br />
Prepare/update<br />
submission for<br />
firm quote (e.g.<br />
full slip)<br />
Select leader<br />
and request firm<br />
quote<br />
<strong>Process</strong><br />
followed for<br />
each leader<br />
Review request<br />
for firm quote<br />
Provide<br />
firm quote?<br />
Revise<br />
terms<br />
Find<br />
new<br />
leader<br />
Communicate<br />
decline to client<br />
Communicate<br />
decline to broker<br />
No<br />
Yes<br />
Note: Discussion on type of documentation required will be<br />
discussed up front between client/broker/underwriter.<br />
* Note: Subjectivities: Common practice is for subjectivities<br />
resolution to be carried on through the placing process (and<br />
potentially beyond), but they are regarded as a subset of terms<br />
offered<br />
Communicate<br />
decision to<br />
insurer<br />
Revise<br />
quote?<br />
No<br />
End<br />
Yes<br />
Prepare & present<br />
firm quote(s) to<br />
client<br />
No<br />
Subscription?<br />
Provide firm<br />
quote (expected<br />
written line /<br />
price & terms)<br />
Yes<br />
Select<br />
follower(s) and<br />
present quotes<br />
and submission<br />
Review<br />
submission/firm<br />
quote request and<br />
leader quote<br />
<strong>Process</strong> followed<br />
for each follower<br />
Communicate<br />
decline to broker<br />
No<br />
Collate firm<br />
quotes<br />
Yes<br />
Support?<br />
Communicate<br />
decline to<br />
insurer(s)<br />
End<br />
Default path<br />
Non-default path<br />
Activity<br />
Decision<br />
Start/End point<br />
Link to/from<br />
another page
<strong>Placing</strong> process - Page 2 (includes: firm order)<br />
James Tranter. MRPO, 020 7327 6605<br />
Client<br />
& Producing Broker<br />
A<br />
(pg1 to pg2)<br />
Request firm<br />
order to be<br />
placed<br />
Start<br />
Yes<br />
End<br />
No<br />
Revise<br />
original firm<br />
order?<br />
Discussion<br />
broker/client<br />
Yes<br />
Accept &<br />
proceed with<br />
different terms<br />
No<br />
Revise<br />
original firm<br />
order?<br />
Discussion<br />
broker/client<br />
Yes<br />
Prepare firm<br />
order (full slip<br />
incl finalising<br />
terms)<br />
Discussion<br />
broker/client<br />
Confirm<br />
acceptance of<br />
alternative<br />
terms to insurer<br />
Discussion<br />
broker/client<br />
Bureau Follower Leader<br />
<strong>London</strong> Broker<br />
Request line(s)<br />
to be written<br />
Note: In some<br />
circumstances<br />
(e.g. facility)<br />
copy of full slip<br />
would go to<br />
leader and<br />
follower<br />
simultaneously<br />
Review full slip<br />
Inform client of<br />
position<br />
Decline<br />
Decline<br />
Note: Not<br />
possible to<br />
decline where<br />
firm quote has<br />
been given on<br />
same business<br />
Alternative<br />
proposed<br />
Outcome<br />
?<br />
Negotiate<br />
Negotiate<br />
Negotiate<br />
Response<br />
Accept<br />
Accept business<br />
(bind / write line /<br />
scratch & stamp<br />
slip)<br />
Accept<br />
Subscription?<br />
Insurer CC<br />
measurement<br />
point<br />
<strong>Process</strong><br />
followed<br />
for each<br />
follower<br />
Yes<br />
Review full slip<br />
Yes<br />
No<br />
Note: Any change to Ts & Cs<br />
during placing will be via an inflight<br />
endorsement<br />
Inform client of<br />
position<br />
Decline<br />
Note: Not<br />
possible to<br />
decline where<br />
firm quote has<br />
been given on<br />
same business<br />
Decline<br />
Negotiate<br />
Alternative<br />
proposed<br />
Outcome?<br />
Negotiate<br />
Negotiate<br />
Negotiate<br />
Response<br />
Accept<br />
Accept<br />
B<br />
(pg2 to pg3)<br />
Accept business<br />
(bind / write line /<br />
scratch & stamp<br />
slip)<br />
When all<br />
insurers<br />
addressed<br />
Default path<br />
Non-default path<br />
Activity<br />
Decision<br />
Start/End point<br />
Link to/from<br />
another page
<strong>Placing</strong> process - Page 3 (includes: finalising signed lines and provision of contract documentation / evidence of cover<br />
James Tranter. MRPO, 020 7327 6605<br />
Client<br />
& Producing Broker<br />
Note: Broker may keep<br />
client informed of<br />
progress throughout the<br />
placing process<br />
End<br />
Receive advice<br />
of completed<br />
placement<br />
Client review<br />
options e.g.<br />
approach <strong>London</strong><br />
insurers again, go<br />
to other markets or<br />
self-insure<br />
End<br />
Receive<br />
Evidence of<br />
cover<br />
Note: Within 30 days for<br />
commercial business<br />
and 5 days for retail<br />
business<br />
<strong>Process</strong><br />
followed for<br />
each policy<br />
End<br />
Receive Policy<br />
(as EoC) within<br />
30 days<br />
Broker CC<br />
measurement<br />
point<br />
Finalise signed<br />
lines (incl sign<br />
down to 100%) &<br />
advise client<br />
Yes<br />
C<br />
(pg3 to pg4)<br />
No<br />
Type of<br />
documentation<br />
required?<br />
Copy of slip,<br />
BID<br />
(not insurer<br />
recognised)<br />
Prepare & Issue<br />
Evidence of<br />
cover (within 30<br />
days)<br />
Bureau Follower Leader <strong>London</strong> Broker<br />
B<br />
(pg2 to pg3)<br />
No<br />
Tidy up of slip<br />
required?<br />
Yes<br />
Client’s order met?<br />
This will require<br />
broker<br />
reproducing the<br />
slip and<br />
circulating to<br />
insurer(s) for<br />
confirmation<br />
No<br />
<strong>Process</strong><br />
followed for<br />
each<br />
insurer<br />
Go back to<br />
insurers to<br />
increase lines?<br />
Yes<br />
Request<br />
increased lines<br />
Review request<br />
for increased<br />
line<br />
G<br />
(g4 to pg3)<br />
No<br />
Increase?<br />
<strong>Process</strong><br />
followed for<br />
each bureau<br />
policy<br />
Add policy to<br />
UPR<br />
Yes<br />
Insurer policy<br />
Wait until<br />
receive<br />
policy<br />
Bureau<br />
policy<br />
Yes<br />
Amend slip & accept<br />
business (bind / write<br />
line / scratch &<br />
stamp slip)<br />
Draft and submit<br />
insurer policy (or<br />
policy<br />
addendum)<br />
AND<br />
Check policy<br />
(Stage 2)<br />
No<br />
Amend policy<br />
No<br />
Ok?<br />
Wait until<br />
closing<br />
submitted<br />
D<br />
(pg4 to pg3)<br />
Yes<br />
<strong>Process</strong><br />
followed for<br />
each nonbureau<br />
policy<br />
Draft and issue<br />
policy to broker<br />
Sign and send<br />
policy to broker<br />
and remove policy<br />
from UPR<br />
Issue Policy<br />
No<br />
Retain for<br />
client?<br />
Yes<br />
End<br />
Default path<br />
Non-default path<br />
Activity<br />
Decision<br />
Start/End point<br />
Note: These checks will<br />
move to pre-bind from<br />
1st July onwards<br />
Link to/from<br />
another page
<strong>Placing</strong> process - Page 4 (includes: original and additional premium accounting, notification of signed lines and settlement<br />
James Tranter. MRPO, 020 7327 6605<br />
Client<br />
& Producing Broker<br />
Receive debit<br />
note<br />
Settle on<br />
one-off basis?<br />
No<br />
Update ledger<br />
Yes<br />
Reconcile<br />
statement<br />
Settle statement<br />
balance<br />
Pay premium<br />
Note: Client could be bureau<br />
insurer requiring reinsurance<br />
(LORS) and pay by central<br />
settlement<br />
Prepare debit<br />
notes (invoice)<br />
and issue<br />
Note: Typically non-bureau<br />
closings are not delinked but<br />
can be (using ACORD<br />
messages)<br />
Reconcile<br />
statement<br />
Settle statement<br />
balance<br />
Receipt of<br />
premium<br />
Closings already<br />
submitted? (e.g.<br />
delinked)<br />
Yes<br />
Trigger<br />
settlement<br />
Bureau Follower Leader <strong>London</strong> Broker<br />
C<br />
(pg3 to pg4)<br />
<strong>Process</strong><br />
followed for<br />
each insurer /<br />
bureau<br />
Amend<br />
submission<br />
E<br />
(pg5 to pg4)<br />
No<br />
Prepare closing for<br />
insurer/bureau<br />
Submit closings<br />
(incl LPAN) &<br />
copy of slip, using<br />
delinked process<br />
Perform<br />
accounting<br />
checks (Stage 1)<br />
Ok?<br />
Note: Further ‘nonfundamental’<br />
splits may<br />
be required . These<br />
may be completed by<br />
various parties.<br />
Yes<br />
Submit before<br />
receipt of<br />
premium?<br />
(e.g. delinked)<br />
Yes<br />
Yes<br />
Bureau?<br />
Forward closing<br />
details and signed<br />
lines message (via<br />
USM and BSM)<br />
Receive BSM and<br />
update ledger<br />
No<br />
No<br />
No<br />
Receive closing details<br />
and signed lines message<br />
(USM) (and settlement<br />
message if not delinked)<br />
Settle premium and<br />
send settlement<br />
message<br />
Was it<br />
delinked?<br />
Delay until<br />
receipt of<br />
premium<br />
Internal<br />
reconciliation<br />
etc and end<br />
Yes<br />
No<br />
Submit closings<br />
to insurer<br />
D<br />
(pg4 to pg3)<br />
<strong>Process</strong> closings<br />
on ledger<br />
G<br />
(g4 to pg3)<br />
Yes<br />
Receive settlement<br />
message<br />
Wait until<br />
settlement<br />
is triggered<br />
(AND)<br />
Settlement<br />
message?<br />
No<br />
Add to<br />
statement of<br />
account<br />
Reconcile<br />
statement<br />
Reconcile<br />
statement<br />
No<br />
Settle statement<br />
balance<br />
Settle statement<br />
balance<br />
End<br />
Bureau?<br />
Yes<br />
Central settlement of<br />
premium and send<br />
settlement message<br />
(USM) to insurer<br />
Receive settlement<br />
message (USM)<br />
Internal<br />
reconciliation etc<br />
and end<br />
Default path<br />
Non-default path<br />
Activity<br />
Decision<br />
Start/End point<br />
Link to/from<br />
another page
<strong>Placing</strong> process - Page 5 (includes: agreeing an endorsement and provision of endorsement documentation)<br />
James Tranter. MRPO, 020 7327 6605<br />
Client<br />
& Producing Broker<br />
Start<br />
E<br />
Request<br />
(pg5 to pg4)<br />
adjustment to<br />
existing contract<br />
Yes<br />
End<br />
No<br />
Revise<br />
endorsement<br />
?<br />
Discussion<br />
broker/client<br />
Yes<br />
Proceed with<br />
partial<br />
agreement<br />
No<br />
Revise<br />
endorsement<br />
?<br />
May need to<br />
create an<br />
endorsement to<br />
back out of<br />
original<br />
endorsement<br />
Discussion<br />
broker/client<br />
End<br />
Receive<br />
endorsement<br />
documentation<br />
Note: Endorsements<br />
of sufficient<br />
complexity / material<br />
significance will<br />
transfer to placement<br />
process<br />
Bureau Follower Leader <strong>London</strong> Broker<br />
Note: This may<br />
involve the client<br />
requesting an<br />
indicative quote for<br />
the impact of the<br />
endorsement<br />
Review existing<br />
contract and<br />
impact of<br />
endorsement<br />
Prepare & present<br />
endorsement<br />
(honeycomb) to<br />
leader<br />
Review<br />
endorsement<br />
Inform client of<br />
position<br />
Decline<br />
Decline<br />
Discussion<br />
broker/client<br />
Alternative proposed<br />
Outcome?<br />
Negotiate<br />
Negotiate<br />
Negotiate<br />
Response?<br />
Agree<br />
Agree<br />
Determine<br />
agreement<br />
parties<br />
Confirm agreement<br />
and GUA parts if<br />
relevant<br />
GUA used on<br />
approximately<br />
60% of<br />
bureau-based<br />
business<br />
Agreement<br />
parties?<br />
Specific<br />
followers<br />
(e.g GUA<br />
part 2)<br />
Present<br />
endorsement to<br />
assigned<br />
agreement parties<br />
Note: In<br />
Lloyd’s<br />
market, this<br />
can just go<br />
to the leader<br />
who informs<br />
the following<br />
market<br />
All<br />
followers<br />
(e.g GUA<br />
part 3)<br />
Present<br />
endorsement to<br />
all follower(s)<br />
Confirm<br />
acceptance of<br />
alternative<br />
terms to insurer<br />
Just leader (e.g GUA part 1)<br />
Review<br />
endorsement<br />
<strong>Process</strong><br />
followed<br />
for each<br />
follower<br />
Inform client of<br />
position<br />
Decline<br />
Decline<br />
Negotiate<br />
Discussion<br />
broker/client<br />
Alternative proposed<br />
Outcome?<br />
Negotiate<br />
Negotiate<br />
Negotiate<br />
Response?<br />
Agree<br />
Establish next<br />
steps<br />
Agree<br />
Prepare and issue finalise<br />
endorsement notification<br />
e.g. honeycomb or<br />
equivalent BID<br />
When all<br />
insurers<br />
addresse<br />
d<br />
Confirm agreement<br />
Additional<br />
E<br />
(pg5 to<br />
pg4)<br />
End<br />
No<br />
Premium<br />
implication?<br />
Yes<br />
Additional / return<br />
premium?<br />
Return<br />
F<br />
(pg5 to<br />
pg6)<br />
Default path<br />
Non-default path<br />
Activity<br />
Decision<br />
Start/End point<br />
Link to/from<br />
another page
<strong>Placing</strong> process - Page 6 (includes: return premium accounting and settlement)<br />
James Tranter. MRPO, 020 7327 6605<br />
Note: Client could be bureau<br />
insurer requiring reinsurance<br />
(LORS) and pay by central<br />
settlement<br />
Client<br />
& Producing Broker<br />
Receive credit<br />
note<br />
Settle on<br />
one-off basis?<br />
No<br />
Update ledger<br />
Yes<br />
Reconcile<br />
statement<br />
Receive<br />
premium<br />
Settle statement<br />
balance<br />
End<br />
<strong>Process</strong><br />
followed for<br />
each insurer /<br />
bureau<br />
Note: Assumed that<br />
return premium is not<br />
delinked<br />
Receipt of<br />
premium<br />
Prepare credit<br />
note and issue<br />
Note: Broker may<br />
issue credit note in<br />
advance of this.<br />
Reconcile<br />
statement<br />
Settle statement<br />
balance<br />
Bureau Follower Leader <strong>London</strong> Broker<br />
F<br />
(pg5 to pg6)<br />
Amend<br />
submission<br />
Note: Further ‘nonfundamental’<br />
splits may<br />
be required . These<br />
may be completed by<br />
various parties.<br />
No<br />
Prepare closing for<br />
insurer/bureau<br />
Bureau?<br />
Yes<br />
Submit closings<br />
(incl LPAN) &<br />
copy of slip, using<br />
delinked process<br />
Perform<br />
accounting<br />
checks (Stage 1)<br />
Ok?<br />
Yes<br />
Forward closing<br />
details and (via<br />
USM and BSM)<br />
No<br />
Receive BSM and<br />
update ledger<br />
Receive closing<br />
details and<br />
settlement<br />
message (USM)<br />
Settle premium and<br />
send settlement<br />
message<br />
Submit closings<br />
to insurer<br />
Internal<br />
reconciliation<br />
etc and end<br />
<strong>Process</strong> closings<br />
on ledger<br />
Add to<br />
statement of<br />
account<br />
Reconcile<br />
statement<br />
Reconcile<br />
statement<br />
Settle statement<br />
balance<br />
Settle statement<br />
balance<br />
Default path<br />
Non-default path<br />
Activity<br />
Decision<br />
Start/End point<br />
Link to/from<br />
another page
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