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Ether IntroductionsEther IntroductionsAn infographic mapping the intricate web of claims interconnections
The London Market claims process is a collaborative effort, orchestrated by several key entities, each with distinct responsibilities. Understanding these roles is crucial to navigating the claims journey. This diagram illustrates the primary participants and their fundamental interactions.
A claim’s journey through the London Market follows a structured, technology-enabled path. While complex claims have many nuances, this flowchart illustrates the typical process for a subscription market risk, highlighting key systems and agreement protocols that ensure efficiency.
Policyholder informs Broker, who submits the claim to the Lead Insurer via the Electronic Claim File (ECF) system.
Lead Insurer reviews the claim, assesses complexity, and appoints experts (Loss Adjusters, Lawyers, etc.) as needed.
Experts investigate the cause and value of the loss, reporting their findings back to the Insurer and Broker.
For subscription risks, agreement is streamlined. The Lloyd’s Claims Scheme or SCAP gives the Lead authority to agree the claim for following insurers.
Broker negotiates the final settlement with the Lead Insurer on behalf of the policyholder.
Funds are collected from all participating insurers via central market systems (e.g., DXC) and paid to the Broker for transfer to the policyholder.
The nature of the risk fundamentally shapes the claims process. Different lines of business place emphasis on different experts and interactions. Below is a comparison of how the claims ecosystem adapts to various specialty risks.
Claims are driven by physical damage. The process is dominated by on-site investigation to determine the cause and quantify the cost of reinstatement and lost income.
Key Players:
The Loss Adjuster’s report on damage and valuation is the central document driving the claim forward, especially for property damage. Forensic Accountants are vital for complex Business Interruption calculations.
Claims arise from allegations of professional error or negligence. The process is typically litigation-driven, focusing on legal defense strategy, coverage analysis, and expert witness testimony from the outset.
Key Players:
The immediate appointment of Legal Firms (Defense and Coverage Counsel) is the critical first step. Expert Witnesses specific to the profession involved are often crucial.
These claims are global, involving damage to vessels (Hull) or goods in transit (Cargo). Swift on-site assessment by technical experts (Surveyors) and understanding of maritime law are crucial.
Key Players:
Marine Surveyors provide initial damage assessments. Average Adjusters quantify complex claims like General Average. Maritime Lawyers and P&I Clubs handle liability aspects.
Cyber claims are a crisis response to events like data breaches or ransomware attacks. The focus is on immediate incident containment, forensic investigation, legal compliance, and managing reputational fallout.
Key Players:
The claim is a live incident response, managed by a panel of pre-approved specialists (Forensics, Breach Coach, PR, Negotiators) activated by the insurer, often coordinated by a TPA or specialized MGA.
Energy claims often involve high-value, high-complexity events (e.g., damage to rigs, pipelines, refineries). They require deep engineering, environmental, and contractual expertise to analyze cause, control loss, and plan remediation.
Key Players:
Highly specialized engineering consultants and environmental experts are central. Specialist Loss Adjusters coordinate the multi-faceted investigation and quantification.
“Insurance for insurers.” Claims are typically a B2B transaction based on the underlying claim paid by the ceding insurer. Data quality, accuracy of bordereaux, and treaty/facultative wording interpretation are paramount.
Key Players:
The claim is a data-driven process, relying on the quality of claims bordereaux from the Cedent. Reinsurers may conduct claims audits for large or unusual losses. The Reinsurance Broker facilitates communication and settlement.
The London Market claims environment is not static. It is constantly evolving under the pressure of external trends and internal modernization efforts. These factors are reshaping relationships and demanding greater agility from all participants.
The chart below represents the perceived impact level of key trends on the London Market claims process, based on the emphasis within industry analysis. Higher values indicate a greater influence on changing operational dynamics and strategic priorities.
Inflation and the push for Digital Transformation (Blueprint Two) are exerting the most significant pressure, fundamentally altering claims costs and operational workflows. Climate change drives loss frequency and severity, while talent shortages pose a long-term strategic risk to the market’s expertise-driven model.
We undertook a full review of the primary UK Third Party Administrator (TPA) followed by an in depth file review audit.
As a result, self serving behaviours from the supplier were identified which were leading to indemnity leakage. New commercial arrangements agreed to reflect a more optimum claims process which lead to substantial savings.
Similarly a data audit of the North American TPA’s showed that sub optimum claims processes were being implemented with an over reliance on use of Loss Adjusters. Revised processes and commercials were negotiated which again led to significant claims cost savings.
We found multiple legal firms being deployed across multiple classes of business with inevitable scope creep.
Once we had established the true spend by firm, we set about rationalising the panel based on performance metrics. Once this was achieved, we designed and implemented a set of billing protocols which each firm had to sign up to.
Finally we engaged with a legal matter management software provider who were able to actively apply the billing protocols and rates agreed on a matter by matter basis.
Here we worked with a very talented Cyber team who had in-depth knowledge a crystal clear vision of what the output needed to look like.
Whilst we often lead claims procurement projects due to our extensive knowledge, there are occasions where we immediately recognise we need to adopt a background supporting role. This was one of those occassions.
We provided procurement and negotiation support on a full blown RFI/RFP covering Incident Management, legal services, IT Forensics, Public Relations and other related IT providers.
We ran a formal process to find an outsourced claims solution to take low value and run off claims following an acquisition.
Each provider had very different pricing models that could not be changed and therefore we created a complex data analysis tool to be able to accurately compare costs and benchmark against internal operational costs.
We provided the performance management blueprint for claims supplier management so that different classes of business were able to proactively manage claims suppliers.
By applying this model as well and commercial improvement methods, savings were soon realised on claims spend.
From being a loss adjuster out in the field we’ve moved to managing teams and then entire loss adjusting panels. We have extensive data on fee bandings, outcomes and indemnity spend.
We are able to audit panel performance on a case by case basis, covering technical application as well as commercial considerations.
We also have a tried and tested methodology for getting the best performance out of loss adjusting firms.
Having previously run repair networks on behalf of insurer clients this has given us a real hands-on knowledge of how to build a repair strategy for insurers.
We have in depth experience of the eco system of building repairs, covering drying, surveying, restoration, asbestos and restoration. We have set insurer strategies and deployed best of breed solutions.
Either as a stand alone product, a bolt on to a main domestic policy or as a value added cover to the main terms, we have expensive experience in undertaken market reviews of home emergency propositions.
We have previously run multiple audits on performance and then strategic reviews of insurers home emergency propositions.
Having previously worked for contents providers we are uniquely placed to provide insight and strategy for insurers when it comes to contents spend.
We have created and delivered strategies for multiple clients for their contents spend. Primarily we focus on validation, repair and then replacement solutions in order to manage indemnity spend.
Main contents items are flooring, jewellery electrical goods and bikes.
In addition to the main commodities, a complete property supply chain requires a lot more additional services. We have led strategies and tenders for all of them.
Suppliers will typically cover the following;
Glazing services, alternative accommodation, drainage solutions, asbestos testing and removal, garden items, DIY kit, weather validation and prediction services, fraud detection and forensics.
