Lloyd's Data Hunger
London’s data hunger used to be driven by the need for risk modelling and investors requirements
For the last ten years or so London’s hunger for data has been driven by the need to keep those who ultimately provide our capital, our investors, interested in supporting binder business by providing sufficient information to analyse books of business.
There was also a need to obtain granular information so that the risks could be modelled to understand the likelihood of claims arising in the event of a catastrophe, such as a hurricane.
In order to understand the nature of risk our risk modellers are interested in collecting data such as primary and secondary modifiers, the full location of the risk and details like the type of occupancy.
We will always be interested in details of risks for modelling purposes; but over the next five years we foresee that regulatory requirements will become a more significant driver in determining the information we need in London.
London’s new data hunger is being driven by changes in tax and regulatory requirements
Tax authorities and regulators globally have been asking the Lloyd’s market for more data and typically at a more detailed level.
As an example, in the past we asked where a risk was located from a physical perspective, but we now also need to know where the same risk is located from a tax and regulatory perspective.
We also need to know key details of premium and claims transactions as well as details of relevant taxes.
The Lloyd’s market has traditionally been focused on large specialty risks, but consumer business is also being placed through coverholders working with the Lloyd’s market. The global regulators are now expecting us to have more information on our policyholders. For example, we need to know more about who our policyholders are and where they are based.
Knowing the data is the right data and that this is controlled, even if we don’t receive it
We need to be assured that the data you are capturing is the right data, and that this is being stored and controlled so it does not get corrupted or lost even when we do not actually receive the data from you.
Our confidence in your data accuracy and security is vital. If we are asked to provide further data to the regulators or tax authorities; we will of course have to request such data from you.
We all know that London has been talking about improving data quality for a long time; but there is now a real cultural change in London including a regulatory framework initiative which is focusing the market on our data and systems.
How should the data be provided?
London still receives data in unusable formats. Unfortunately, people in London cannot really do anything with data if it arrives in PDF, fax or paper formats. This is an issue as it means lots of re-keying in London.
Those coverholders who can send information on their risks, premium and claims in XML format should let their London partners know, as this will eventually help us to arrive at one consistent and universally accepted format.
Coverholders who cannot submit XML should send spreadsheets wherever possible.
Obviously other formats may also be acceptable, such as EDI files, but please talk to your partners in London for more information.
Details of spreadsheet templates and ACORD XML messages can be found here.
In London, some people still use the outdated term 'bordereaux' when we are talking about coverholders reporting on risks, premiums and claims to London. Just to be clear, when we talk about bordereaux nowadays we should really just be talking about transmitting data.
Our overall objective is to receive data in real-time, with no re-keying. The roadmap we are working towards will ensure that everyone knows about the data that is needed and why; then coverholders can check if they can provide it; and if they can then they should send it in. Regardless of the technology and how coverholders provide London with the data, they should just send us all they can.
London has a vision of real-time information at the most granular level for optimised decision making. There are some obvious benefits of operational efficiencies and better decision making.
Once all this in place, none of us will have to worry about creating or managing bordereaux anymore.