The%20LIM%20Organization%20Structure

1
London Insurance Market (LIM)

• The LIM Organization Structure
• International Center for Insurance services
• Attracts about over 4b in the form of invisible
  export earnings annually.
• Comprises of hundreds of independently owned and
  managed brokerage and underwriting (or insurance)
  businesses and market leaders.
• No central authority governing the market but
  each participant is affiliated to a respective
  broker or underwriter trading association.
• Culture of the market is based on personal
  relationships and trust.
• Very innovative and
• Risk placement business Process in LIM

2
London Insurance Market (LIM)

• Objective of LIM systems
• Development of market based inter-organizational
  systems
• To streamline business processes and save market
  costs while improving quality
• To safeguard its reputation as the key
  international insurance market globally
• Cost saving of about 300m pounds

3
London Insurance Market (LIM)

• Challenges facing LIM
• Weather they would be able to achieve critical
  mass for the adoption of the key and hotly
  contested electronic placing support systems
  (EPS)
• Lim was experiencing a number of years of
  consecutively high losses of over 2 billion
  pounds in early 1990s about 15 billion pounds in
  late 1990s / early 2000.
• A number of potential competitors were
  threatening the LIM industry position
• The need for effective change management in
  implementing inter-organization systems
• Underwriters, Brokers,

4
London Insurance Market (LIM)

• Trends International Insurance
• Increased globalisation
• Client
• Areas of new opportunity globally
• The development of new communications and
  information technologies
• Continued growth of alternative underwriting
  markets

5
London Insurance Market (LIM)

• Technology development at LIM
• London Insurance Market network (LIMNET)
• http//www.ecommerce-awards.com/awards2000/winners
  /Case20Studies/Limnet20Ltd2093.html
• EDI systems
• Computer Data Exchange (C-DEX)
• Developed by a US-broker subsidiary in London to
  significantly lower the cost of risk placement.
• Strategic importance
• To prevent the central Lloyds body to have a
  central database of information therein lies the
  power
• The brokerage firm knows who declines what risk
  and why.
• Whoever holds the customer data holds the whips
  handle
• It is not for the whole market
• Cultural differences between US and Europe?

6
London Insurance Market (LIM)

• LIMNET EPS
• Strategic Relevance
• That London was at the forefront of technological
  developments
• Reinforcing its status as an important insurance
  market globally.
• In addition, EPS would support the placing of
  business between underwriters and brokers
• Considered to be the heart of the work of this
  insurance market,
• reducing costs and improving service quality.
• Implementation was considered pivotal in the
  radical transformation of the Market as all other
  business processes flowed from this front-end
  process

7
 
London Insurance Market (LIM)Risk Placing Process
  Broker Creates Risk package with input from
client
Package
Broker Presents Risk Package to Underwriter
Lead Underwriter Assesses Risk Package
Note After negotiation with lead Underwriter,
Broker request participation from fellow
Underwriters who typically accept agreed terms
and conditions.
Request
Lead Underwriter may Request Supporting
Information
Broker Receives Request and supplies Requested
information
Information
Negotiation /Closure
8
London Insurance Market (LIM)

• LIMNET EPS
• Benefits
• Supports existing process?
• Improved efficiency through a reduction in data
  entry costs and improved accuracy of data
• Speed up the placing process
• Effective in distributing risks and physical
  visit would no longer be necessary
• Initial capture of risk information in EPS would
  efficiently feed into other London Market systems
  to support back end processes such as claims
  systems and accounting without the need for data
  re-entry

9
London Insurance Market (LIM)

• LIMNET EPS
• Challenges
• Brokers and underwriters approach to IT
• Stakeholders multiple interpretations
• Ability to monitor brokers efficiency
• Expected to provide a shift in power and control
  of the business from underwriters and brokers to
  senior management
• Loss of personal relationships and trust
• Loss of collected significant market intelligence

10
London Insurance Market (LIM) Global Influence

• Placement will become a highly specialized
  function conducted at a small number of sites
  globally we are building a global placement
  system linking all our international offices
  into the market through global broking centers or
  'dealing rooms' that control the traffic (
  US-Broker Publication)
• The market for industrial/commercial risks is
  globalising. It is just as likely that the
  placement for one of our major N. American
  clients will be made in Bermuda, Switzerland or
  France as in London or New Yorkit is therefore
  essential that our business transformation
  efforts be applied on a global scale and that we
  develop methods and technologies that can
  efficiently operate anywhere. (Vice Chairman US
  Broker April 1994)
• They are 'bloody minded, different and
  aggressive... We are doing it in a market way, a
  unified way.... Their system shows UDI
  (Unilateral Declaration of Independence)...They
  are on their own.... I am convinced they are
  hoping that the EPS system would fail so that
  their system will become the standard.
  (London-Broker Director 1994)
• US Brokers strategy is a competing one to the
  London Market with significant differences in
  value judgments since they are using technology
  for differentiationI think US Broker has vested
  interests to see the JMI (EPS) fail. (LIMNET
  Director Oct 94)

11
London Insurance Market (LIM)

• Recommendations in 1995 Going forward what would
  you do?
• Impact of Lloyds CEO exit
• Establishing industry standard and
  inter-organization systems
• Change technological environment
• Global positioning.
• Alliance? With who and why?