Brokers in the London insurance market still, largely, rely on a document called a “slip” or, more officially, a “Market Reform Contract” (MRC) to negotiate commercial insurance risks with underwriters. The process varies between the 197 Lloyd’s brokers, but generally, begins with the preparation of an MRC in MS Word. Little or no data is captured during the process, and any information needed to track the deal is rekeyed (often multiple times).
When brokers accept a share of the risk, underwriters take a copy of the MRC and key the data they need to track, such as what they have accepted and how they are exposed.
That is a lot of unnecessary rekeying, with a significant risk of entering information incorrectly, which can result in rework or, potentially, an E&O exposure.
The ideal situation would be for brokers to capture risk data during the creation of the MRC and to make it available to subscribing underwriters’ systems instantly upon their acceptance of a share of the risk.
A pilot project recently launched by Lloyd’s shows how this scenario is now possible without rekeying or adding to the broker’s burden. The initiative is called “Smartforms” and further details can be found on the Lloyd’s website.
Exari is at the heart of the project, providing an easy-to-use web-based questionnaire for building a structured MRC with class-specific conditions and variable data. ACORD compliant XML data is generated as a by-product of creating the document, which can be passed on to underwriter’s systems via the various market gateways.
The Smartforms initiative shows the London insurance market that a more modern approach to capturing and sharing data about their risks is within easy reach, but also demystifies the process for overseas agents who might want to send business to Lloyd’s directly.
It will be interesting to see which companies take advantage of the opportunity to trade more efficiently.