The Lloyd’s market spent more than £1 billion on third-party experts in the past 24 months, according to the Lloyd’s Market Association (LMA), prompting the need for greater control over claims costs.
In June, the claims committee of the LMA, whose Lloyd’s members manage a gross premium income of around £32 billion per annum, approved the project to create the Claims Expert Management Hub for the Lloyd’s market. The hub will enable managing agents to monitor the effectiveness of claims experts, as well as track and control associated costs—all digitally.
Advent Claims was selected as a partner and vendor for the hub late last year, and the LMA and Advent Claims are working to move the project toward delivery, scheduled for later in 2018.
According to Lee Elliston, claims director at the LMA, the hub is one step in the Lloyd’s market’s journey toward becoming a much more digital marketplace.
Claims Media (CM): To what extent—and in what ways—is the Claims Expert Management Hub borne from a desire to modernise the claims process?
Lee Elliston: Lloyd’s is moving towards becoming a much more digital marketplace. Data capture, manipulation, and sharing is one of the routes towards modernising the market, and holds out benefits for all market functions, including claims.
The Claims Expert Management Hub is just one of many important step towards a more modern claims process, and is based on current technology allowing it to integrate with current/future platforms and services, including Electronic Claim Files (ECF).
Without comprehensive data on what the market spends on claims experts, the professional advisers they hire to provide claims-related services on a claim-by-claim basis such as loss adjusters and lawyers, LMA members—Lloyd’s managing agents—could be making uninformed decisions on the appointment and continued provision of claims experts.
That could result in unnecessary spending, or insufficient management oversight of those experts. The hub modernises the process by introducing new, technology-driven efficiencies.
Meanwhile, Lloyd’s has introduced a new Minimum Standard for Claims Management that requires managing agents to demonstrate control of all the third parties they work with, including the appointment process and ongoing management of external experts. They will be looking at selection based on performance, agreeing budgets, and validating fees based on agreed scales.
The Claims Expert Management Hub will provide the data and performance oversight necessary to demonstrate adequate control of claims experts.
CM: What key features did the association and its members want from the hub?
Elliston: The LMA Claims Committee (LMACC) identified two gaps that currently exist in relation to the data capture of managing agencies’ spending on claims experts: the management of claims leakage and the oversight of experts.
In the data capture and spending area, managing agents f