XML for Binding Authorities - Acord

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Lloyd’s coverholder reporting
standards and acord xml
Sarah Thacker, Lloyd’s
25 april 2013
© Lloyd’s

The business problem
► Coverholders typically
work with more than one
syndicate.
► Each syndicate asks for
different data.
► Coverholders have
additional costs, time and
effort to meet all the
requirements.
► The originating retail
agent did not know the
key information they
needed to capture so it
could not be passed up
the chain anyway.
► Key information to run risk
models is missing.
► Tax and regulatory
requirements cannot be
met.
► Premiums cannot be
processed without
minimal details.
► Claims cannot be
managed properly as
information is missing.
► Basic information about
the coverholder or the
contract is missing.
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© Lloyd’s

Lloyd’s
objectives
► To make it easier for coverholders to
work with London.
► Better information into London.
► Improve process efficiencies and
enable greater use of technology.
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© Lloyd’s

Lloyd’s vision
for
coverholder
data
processing
(2010)
To standardise the flows of risk, premium,
claim and accounting information between
coverholders and the Lloyd's market by
working with market participants and
ACORD to agree data standards which
can be used both within and outside the
Lloyd's market.
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© Lloyd’s

No more bordereaux
The coverholder keys
information about the
risk, premium or
claim into their own
system
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The computer
automatically sends
the information to
your system in
London
© Lloyd’s

No more manual data manipulation
► The system does the work
Validates
data
Stores
data
Analyses and
reports on
data
© Lloyd’s

No more
differing
formats and
layouts
The system presents all the information
from all the coverholders to you in a
consistent way.
► Dashboards
► Screens designed for you
► Paper reports
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Lloyd’s introduced
coverholder reporting
standards
for premiums, claims
and US property
exposures; these state the
information to provide
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www.lloyds.com/
coverholderreportingstandards
© Lloyd’s

Reporting standards
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www.lloyds.com/coverholderreportingstandards
© Lloyd’s
© Lloyd’s 2013

Tools to
help you
Failure to identify the correct territories for
regulatory and tax purposes may lead to:
► delays in premium processing
► invalid insurance contracts
► inaccurate regulatory reporting and funding
► incorrect tax returns and tax payments
► insured’s, intermediaries or underwriters
subjected to fines
► damage to Lloyd’s international reputation
► All parties in the placement chain should
comply with regulatory and tax obligations
www.lloyds.com/crystal
© Lloyd’s
© Lloyd’s 2013

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But alone
lloyd’s
reporting
standards do
not solve all the
problems
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© Lloyd’s

differing formats and the need for
manual intervention
► Information received as
an unstructured PDF, on
paper or in some other
format which means it is
not useful.
► Information in a
spreadsheet but it is
unclear what each column
contains.
► Columns have been
added or deleted since
last month and
processing cannot be
automated.
► Submissions rarely look
the same.
► The coverholder does not
want to be given yet
another system.
► Complex requirements
such as multiple taxes
and requirements for
different risk locations
make arriving at a
standard spreadsheet
almost impossible.
► Manual re-keying at
coverholders and in
London.
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A common
format
► ACORD XML provides a consistent
format.
► Standard, simpler information flows.
► Information can pass from system to
system no need for re-keying.
► Coverholders, brokers and syndicates
are free to use their own systems and
technologies.
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© Lloyd’s

ACORD bound risks
standard
• Worked with Lloyd’s
and ACORD
membership to create
• Property risks reporting
spreadsheet standard
• XML message
equivalent
• Done as part of wider
exposure reporting
working group
© ACORD 2013

Premium and Claims –
started with Lloyd’s
template
• Lloyd’s has published
• Premium and Claims
spreadsheet template
• Guide to using them
• Content driven by
regulatory reporting
requirements
• Data in the templates
fulfills requirements for
reporting back to
country/state of origin
© ACORD 2013

Why Binders Are Important
• Coverholder business is significant part of
Lloyd’s business
• From USA (surplus lines market)
• From UK / elsewhere (all types of risks)
• For reporting risks bound and premium/ claim
transactions
• Carrier review
• Lloyd’s receives data for regulatory returns they make on
behalf of syndicates back to countries of origin
• London one of the biggest USA surplus lines
carriers
© ACORD 2013

Some views from MGA/TPA’s
• Excess and Surplus lines Joint Working
Group (ACORD/AAMGA/ACT/NAPSLO)
met last October
• In a dedicated session two members of
that group presented views regarding
the value of the premium and claim
standards
© ACORD 2013

MGA Viewpoint
• Differences between US market and
London Market
• Different data and format requirements
by broker(s)
• Processing time to submit to London
© ACORD 2013

Premium processing
Most Surplus Lines carriers are paid monthly by
the MGA Account Current Statement
© ACORD 2013

• Premium process
• Coverholder sends details of premium transactions to broker
• Broker sends this to Xchanging (3 rd party provider) and carriers
• Xchanging provides information to Lloyd’s for regulatory
reporting
© ACORD 2013

London Market
• Data requirements vary
• Processing time to submit monthly reports
• Processing of Payment
Sample Report
© ACORD 2013

Requirements for Claims Reporting
• Most USA surplus lines carriers receive a direct feed – daily, monthly, weekly
• Funding comes in for monthly total
• So its simple for USA – payment of total amount in 15 days
• Harder for London where pay later and split by year a/c
• Data requirements have become more detailed (feedback into u/w process)
• Data formats required by carriers all different layouts
Report
Coding
Monthly
Funding
Monthly
Feed
© ACORD 2013

• Claim process
• Coverholder or TPA reports claims to broker
• Broker sends this to Xchanging (3 rd party provider) and carrier/s
• Xchanging provides information to Lloyd’s for regulatory
reporting
© ACORD 2013

Some specific benefits for claims in
dealing with London
• Shorten collection times
for various bordereau
• Uniformity for auditing
purposes
• Improve burdensome
processes that are already
in place due to lack of one
standard
© ACORD 2013

Summary of benefits of a consistent
standard from an MGA/TPA
Perspective?
© ACORD 2013

Where are we?
Three new XML messages
1. XML Property bounds risks report (ER3001)
2. Premium transaction report
3. Claim transaction report
*** Challenge now is implementation ***
© ACORD 2013

Demystifying XML
Kirstin Duffield, Morning Data Ltd

Working Group
BAS
S
Coverholder
Vendor
Morning
Data
EIS
Wholesale Broker
AC
E
UW / Syndicate

Unit Size What It Means
Bit (b) 1 or 0 A binary digit (1 or 0). The foundation of all computing.
Byte (B) 8 bits 1 byte = 1 letter or number of the English language.
Kilobyte (KB) 1,000 bytes From "thousand" in Greek.
Megabyte (MB) 1,000 KB From "large" in Greek. The complete works of Shakespeare totals 5MB.
Gigabyte (GB) 1,000 MB From "giant" in Greek. A two hour film equals 1-2GB.
Terabyte (TB) 1,000 GB From "monster" in Greek.
Petabyte (PB) 1,000 TB or 1,000,000 GB All letters delivered by the US Postal Service in a year amounts to 5PB.
Exabyte (EB) 1,000 PB or 1,000,000,000 GB Equivalent to 10 billion copies of TIME magazine.
Zettabyte (ZB) 1,000 EB or 1,000,000,000,000 GB Total amount of data in existence in 2010 was 1.2ZB.
Yottabyte (YB) 1,000 YB or 1,000,000,000,000,000 GB Currently too big to imagine.
They call it “Big data” for a reason

Since The World’s the beginning Data Storage of time… (in EB)

Understanding XML
Phil Collins, Morning Data Ltd

What is XML?
› Text with structure
› Sole purpose is to carry data
› Solution to War on Keystrokes
› Breaks language barriers
› Promotes standardisation
› Built-in validation
› Non-ambiguous
› Readable

What’s wrong with CSV?
› No structure
› No validation
› Difficult to read
› Very ambiguous
› Easy to make mistakes
› Single language
› Flat, single-level data

A cupcake recipe in CSV format.

I guess it’s still edible.

The
same
recipe
in XML

XML can adapt.

It’s all just data.

So much data, so little time.

Descriptive and
easy to validate.

XML is built to carry data.

How XML can Improve
Efficiency and Profitability
for MGAs and Companies
Chance Gilliland, ASLI
ACE Syndicate
Lloyd’s of London

6 Pillars of Data
1) Data Management
2) Reporting
3) Data Analysis
4) Data Modelling
5) Fast Data
6) Big Data
Where MGAs need to be
Experts
Where Companies
need to be Experts
So how can XML help improve Efficiency and
Profitability for MGAs and Companies?

Data Management
and Reporting with XML
MGA Company Benefits?
Less time compiling
spreadsheets.
More efficient data
capture and data
management with XML
More efficient data
transfer with XML
Less time spent
chasing/scrubbing data
Better Data Quality
Data received Faster
Improved Profitability
and Efficiency

Data Analysis and
Modelling with XML
Company MGA Benefits?
More time can be spent
on value-added analysis
to improve profitability
MGAs will benefit from
improved carrier
profitability, which will lead
to improve MGA
profitability
Improved Profitability
and Efficiency
More efficiency, more profitability!

How XML can Improve
Efficiency and Profitability
for MGAs and Companies
• More efficiency in the reporting and transfer process
• More time can be spent on value-added analysis to
drive profitability
• Saves time, energy, and money for everyone