The Boards of the International Underwriting Association of London (IUA) and the London Market Association (LMA) recently approved a proposal from the London & International Insurance Brokers’ Association (LIIBA), and the broking community to develop a Single Claims Agreement Model in the London market.
The proposal aims to establish a single claims agreement model in the London marketplace for non-complex claims within an agreed financial threshold, and has now moved closer to becoming a reality after receiving approval from the IUA and LMA Boards.
The LMA, IUA and LIIBA are working together with the specialist Lloyd’s of London insurance and reinsurance marketplace to establish the model, which would enable policy leaders to authorise claims up to an agreed threshold on behalf of clients.
Christopher Croft, Chief Executive Officer (CEO) of LIIBA, 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.”
In a press release the organisations announced that participation in such an agreement is to be considered at the point of placement, and work is reportedly already underway to develop the relevant framework needed to establish the proposed model.
When the final framework is completed it will be the responsibility of the parties to the risk to elect whether to adopt the new model at the point of underwriting, the organisations explained.
“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,” said David Gittings, CEO of the LMA.
Currently, business underwritten within the Lloyd’s and broader London marketplace is subject to varied claims agreement protocols, with as much as half of the market’s subscription business written on a cross-market basis.
Following syndicates under the Lloyd’s Claims Scheme are bound by the decisions of the lead underwriter for standard claims, typically below £250,000. However, the organisations explain that in the company market, typically, insurers aren’t bound by the same decisions, with all IUA carriers having 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,” explains the press release.
“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,” said David Matcham, IUA’s CEO.
While Shirine Khoury-Haq, Lloyd’s Chief Operating Officer (COO), 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.”
