The development of a Single Claims Agreement Model in the London Market, for non-complex claims within an agreed financial threshold, has taken a significant step forward after gaining approval from both the IUA and LMA Boards, following a proposal from LIIBA and the broking community.
The proposal is to establish a single claims agreement model which would enable policy leaders to authorise claims up to a certain value on behalf of following carriers. Participation in such agreements will be considered at point of placement.
The LMA, IUA, LIIBA and Lloyd’s are in agreement with the plan to deliver a single agreement model. Work is now already underway to build the necessary framework to deliver the proposed Model and further details will be communicated to the Lloyd’s and London Market in the coming days. Once the final framework has been published it will be for the parties to the risk to elect to adopt the Model at the point of underwriting.
LIIBA’S CEO Christopher Croft said: “The broking community is delighted that we can move forward with the Single Claims Agreement as it will expedite the handling, agreement and payment of uncontroversial, small to medium sized losses under London Subscription Market placements to the benefit of clients”.
LMA’s CEO David Gittings said: “The delivery of a market-wide agreement will become a reality thanks to the collaborative efforts of the LMA, IUA, LIIBA and Lloyd’s. The Single Claims Agreement model will make the settlement of claims in the London market more efficient and will offer an improvement in service and customer experience.”
IUA’s CEO David Matcham said: “The introduction of an option to provide for a single claims agreement, at the time of placing promises to make the processing of claims in London faster, cheaper and more effective.”
Lloyd’s COO Shirine Khoury-Haq said: “This is further evidence of the London Market’s commitment to modernise and make it easier for our stakeholders to do business with us. Claims is a crucial part of the customer experience and this step reinforces the London Market’s commitment to its customers”.
At present, business written in the Lloyd’s and London company markets is subject to differing claims agreement protocols. It is estimated that around half the market’s subscription business is written on a cross-market basis.
Under the Lloyd’s Claims Scheme, following syndicates are bound by the decision of the lead underwriter for ‘standard’ claims within a set class of business thresholds, typically below £250k. However, in the company market, typically insurers are not bound by the lead insurer’s decision and each IUA carrier has agreement rights to the claim for their proportion. The Single Claims Agreement proposal will enable agreement by the slip lead to bind all followers on risk.