Lloyd’s has been very supportive of improving the quality of data reported by coverholders to managing agents. After all, Lloyd’s wants to measure its collective exposure accurately and with as little delay in reporting as possible.
For example, with hurricane Bill being a big storm and potentially flooding much of the East Coast of North America and possibly hitting land in Nova Scotia, how much property do the Lloyd’s syndicates cover?
Roughly 40% of Lloyd’s coverage comes from local managing general agents with authority to bind risk on behalf of Lloyd’s syndicates and these local underwriters (called “coverholders”) are required to report on a monthly basis. Assuming these reports are sent 15 days after the close of the month, the syndicates might today have some sense of new policies written in July 2009 but no sense of what has been written so far in August. So if you asked a syndicate or Lloyd’s itself how much exposure it has to Bill, it would know most of, but not all of the policies in force.
Compounding the problem for Lloyd’s is the quality of the data it receives from coverholders. Their reporting, called “bordereau”, comes in a wide variety of formats and getting accurate data is a challenge. Syndicates use sophisticated risk modeling services to measure its exposure and our CoverIQ product is in use today by Hiscox to gather data from many coverholders in many formats and normalize the data for use in RMS models.
ACORD adopted our data structure developed with Hiscox as its binder standard and last week AIR announced it will accept data in this format. So our CoverIQ is now useful to all syndicates whether they use RMS or AIR and today we’re talking with Sword Intech about their Open Xposure product.
Carl Philips of Lloyd’s authored a good blog post yesterday restating Lloyd’s intent to make this standard widely adopted among its syndicates and the brokers and coverholders who source their US property business. We’re in London in 2 weeks to discuss the solution with more syndicates, let us know if you’d like to talk about getting quality bordereau data in a timely fashion.