New survey confirms Electronic Claims File (ECF) is here to stay
22.09.2008
London remains pre-eminent in the global insurance market but strengthening challenges from Bermuda, Continental Europe and Singapore underline the importance of faster service and first-class claims handling. On the second anniversary of the introduction of the Electronic Claim File (ECF), an independent survey of insurers, brokers and other market practitioners has found that three-quarters of the London market has bought into the system.
There were fears in the industry that although the old manual process of claims handling was recognised as slow and inefficient, there would be resistance to the thorough change in working practices that ECF represented. But the survey, initiated by City lawyers CMS Cameron McKenna and leading international insurer Markel International and conducted by Populus, reveals a high take-up of ECF in the market - especially by Lloyd’s managing agents (96 per cent) and brokers (86 per cent). Savings from manpower reduction and offshoring, as well as increased flexibility, were all cited as leading to significant improvements in business efficiency and service provision. All but a small percentage (15 per cent) of new claims can be handled by ECF, and continuing improvements are being made to allow existing claims to be supported by the system. A majority of the market regards ECF as having changed the way their particular organisation works.
Gary Bass of the LMA commented “I am delighted with the profound progress made by the London market in the ground breaking area of electronic claims files. In a relatively short space of time the transition from a predominately manual claims handling process to electronic claims handling has been significant. The ability to compress the distribution chain to now compete on a level playing field with local, direct dealing markets is a real business advantage. Nonetheless we still have a long way to go. We need to continue to improve the day to day user experience and strive for greater efficiencies and improved service delivery to our clients. Continued investment of time, intellect and resources' are required for the foreseeable future to ensure the success of ECF in the London market.”
The survey shows that insurance companies without a Lloyd’s operation are less enthusiastic about ECF although those who have used ECF report an improvement in service levels. In part this may be explained by the need to upgrade software to accommodate the system. Respondents identify continuing technical problems that in some cases reportedly slow the claims process.
Across the surveyed market the call was for increased investment in improving the efficiency of ECF. Improvements in workflow systems, alerting concerned parties to changes in claims’ status and speeding-up agreement procedures, would help complete the implementation of ECF. Ultimately, the main beneficiary of the system should be the client, and getting that service delivery right will sustain London as the market of choice. With all the caveats that might be expected from such a diversity of practitioners, the survey confirmed a widespread acceptance that ECF is here to stay and, with further investment, will provide a platform to meet the London market’s objective of delivering pre-eminent client service.
Liam O’Connell, Head of the Insurance and Reinsurance Group at CMS Cameron McKenna, commented, “The requirement for an effective electronic trading platform has been clearly demonstrated – the challenge for the market is to make sure ECF delivers”. Stuart Willoughby, director of claims at Markel agreed “The London market has made substantial progress in recent years in claims management but must adopt new technologies and invest accordingly to remain the ‘market of choice’. In the industry debate about ECF I feel strongly that the needs and requirements of the client must not be overlooked. ECF can deliver real service enhancements to the end-user.”
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