26th October 2021
London market underwriters and syndicates have received a clear message that the far-reaching reforms to the way the market does business will not impinge the ability to tackle their extensive legacy issues.
Changes to the way London does business as spelt out in the Lloyd’s Blueprint for the Future will see a wholesale move to more digital trading. There is no doubt it will have a profound effect on the cost of doing business, as the market looks to tackle frictional costs. While this is designed to allow Lloyd’s and London market underwriters to access business that previously would have been uneconomic it is likely to take time for those benefits to filter through.
However, the blueprint is specific when it comes to legacy issues. “Given the nature of business in the Lloyd’s market, legacy processing will continue for some time. There is no intention to migrate legacy systems and processes for historic business,” it states.
While syndicates remain focussed on the future, they would be well advised not to ignore the significant opportunities that may well exist in their past. The effective management of their legacy book is likely to pay sizable dividends. Whilst looking to the future operating models they need to examine how they can change their approach to legacy issues and in doing so deliver efficiencies that will positively impact their bottom line.
Our legacy collection service has built a proven and impressive track record which clearly demonstrates that looking back to the past can realise significant income for the future.
The ability to identify and then access trapped premium income which has been often dormant for many years, but no efforts made to recoup it, has become a major issue for London’s underwriters. Once identified the income can be retrieved simply and swiftly. Our clients have benefitted to the point where we have been able to recover in excess of £500 million of legacy premiums which have then been put to effective use in their current and future underwriting activities.
Those processes do not require a significant amount of investment hence the rewards are not only tangible but cost efficient. We provide a clear focus on behalf of our clients, and we will work alongside them without the requirement for any upfront costs. We are only remunerated when successful, making this a no risk process for the client.
With £500 million in premiums recovered our results speak for themselves and our clients have been enjoying the positive balance sheet impact from the additional cash flow and increased profit from unbudgeted collections.
There is a clear process to be followed in order to maximise the benefits that can be delivered.
Each policy needs to be tackled on a standalone basis. You need to examine and identify unpaid delinked signings, and any unaccounted adjustment premiums.
Missing bordereau and treaty accounts, need to be identified and tracked, as do any missing profit commissions, and the provision of confirmation when no further premium is due.
By benefitting from our feedback process, clients are able to make informed decisions to manage their Estimated Premium Incomes (EPI) effectively, thereby bringing any legacy premium transactions into clear focus and hastening the delivery of any income due.
The London market can be forgiven for focusing on the future. The past two years has seen the implementation of technology to enhance the ability to transact business advance at a rate which would not have been considered prior to the COVID-19 pandemic.
But to simply focus on the future would be ignoring the potential legacy business assets, which still remain across the market.
Our view remains that to be prepared for the future, we need to look to the past, for the unclaimed premiums that will enhance underwriters’ ability to thrive in the future.
For more information on legacy and credit control services, please contact Sarah Savory, Director of Premium Credit Control on firstname.lastname@example.org
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