You only get out what you put in

I return yet again to my favourite subject: benefits. Put another way, advantages, gains or promotion following the publication of the Endorsements Pilot review by Ernst & Young (available on the LMA’s website).

What never ceases to amaze me is the array of benefits that occur after a major process change programme has been implemented. Many of these are often never even considered in the original cost-benefit and it seems that using ACORD messages to support the placing of endorsements has followed this pattern. I have referred to a couple of these in previous blogs but now an independent report has validated these early assessments.

Whilst operational efficiency, reduced error rates and improved turnaround were all expected, real gains have also been seen in improved use of skills, transparent tracking, improved credit control, capital allocation and improved management information.

None of these were originally predicted, but I think some of this is down to the creativity of individuals - having been given a basic set of tools, they seek to optimise the usefulness of these.

A key thing that struck me was that volume and integration are the key to optimising these benefits (as I've discussed before). As soon as significant volumes are coming in electronically, underwriters and brokers can justify re-focusing their teams and optimising their business process.

This in turn leads to increased benefits, which ultimately drives investment in technology to simplify the process further and, you guessed it, more benefits. 

There are of course flavours of integration, which are individual to particular market firms, a further example of choice, these include:

• Integrating message based endorsements into existing workflow systems alongside other methods of receiving endorsements.
• Integration with workflow as above and the creation of back office record for the endorsement.
• Full integration into workflow as above, creation of a back office record and automatic population of many fields of information.

Whilst not nirvana, (many would argue for a ‘fatter’ message, so more of the back-office record could be populated), it does move firms along the road to straight-through processing at their own pace and allowing their own choice of integration. However, it is clear the more firms put in the more they will get out in terms of benefits.

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