Four year’s ago, I flew from New York to London on a business trip aimed at beginning the work necessary to help one of the Lloyd’s of London syndicates (and their vendor partners) to modernize some shared and cloud-based insurance support technology, leverage international standards, and innovate business processes. My global information, software, and services employer at that time code named the project “Apricot” and the scope included North America, Continental Europe, and Asia Pacific because this London risk taker was also a global insurance carrier.
Fortunately, project “Apricot” was eventually an international success and our goals were achieved thanks to the work of countless people and several years of effort and investment. Moving forward to present day, our consultancy now sees these “Apricot-like” themes emerging across the entire London Market (LM) and most notably for this article, the multi-year global modernization and innovation project now advancing under the agreed name “TOM.”
Unlike Apricot, however, “TOM” is an acronym and it stands for something very important to the future of the entire London Market. “TOM” stands for the “Target Operating Model” which represents a shared and collective vision of the desired future state of London Market insurance operations. TOM is guided by the London Market Group (LMG), an organization which represents the insurance and reinsurance market in London.
Many of the TOM investments, all of which are overseen by the LM TOM Steering Board, have a direct impact on work being carried out this year by the CHART organization and its members (coverholders, potential coverholders, London risk takers, and vendor partners).
As a result, it is crucial for all of us to be conversant in the language of TOM, understand the history, and appreciate the future objectives. Hopefully this article will help all of the adopters of CHART-Exchange to be on the same page with TOM so that we ensure our alignment with not only the London Market we know from the past and present, but also the London Market of the future.
Speaking of the past and to help provide TOM context for everyone (as some of us may already know) back in November 2014, the London Market Group released a compelling report on the competitive position of the London Insurance Market, called “London Matters.” The report was written by Boston Consulting Group and, at the time of this writing, is available on their consultancy’s website.
Among the notable findings, was the communication of a challenge within the London Market of its expense ratio being 9 percentage points higher than industry peers. As a result of this finding, and other details set forth in London Matters, the report presents opportunities for the London Market to pursue in order to address its challenges and retain as well as improve its leading position in the world of insurance.
Among the key opportunities identified was the need to reduce the cost of doing business by delivering on infrastructure activities, removing London-specific processes, and realizing economies of shared service. LMG responded to the insights from “London Matters” and one of the outcomes from their response is our good friend, TOM.
Throughout much of 2015, the London Market analyzed and determined “what” it should do in response to “London Matters” and “how” it could get done effectively. With the support of KPMG management consultants, the entire London Market (and its vendor partners) thoughtfully created and set forth a vision of the future state of London insurance operations via the Target Operating Model approach and therefore “TOM,” was brought to life in London and indeed around the world.
TOM’s lifespan is expected to be longer than my old friend Apricot, with most literature describing efforts to continue through at least 2020. However, TOM has already achieved deliverables within 2016 (announcements as recently as 12 April 2016) and we expect continuous positive changes to occur throughout TOM’s existence and in accordance with priorities set by the LM TOM Steering Board mentioned earlier.
Among the priorities for 2016, and very encouraging for CHART, there is a current emphasis on improving the processes that support Delegated Authorities (DA) as well as efforts to enable better data management through the evolution and application of international insurance data standards (see also the ACORD website).
Through these and other interdependent 2016 efforts, TOM is working to achieve one of its goals of enabling the straight through processing of data from coverholders (building on prior success from Project Tomorrow). Business processes, insurance support technology, and other delegated authority-related insurance operations will evolve across the entire London Market ecosystem into something more modern, more automated, and more efficient. All of this is being designed in such a way as to take advantage of international insurance data standards as well.
Therefore, as we can see, it is important for all of us involved in the CHART-Exchange to appreciate that our understanding of the Delegated Authority processes from yesterday will not stay exactly the same in the future. We are improving them, we are modernizing them, and we are doing all of this under the name of TOM.
Just like project Apricot, I believe TOM will be a success for the London Market and it will continue to deliver valuable change this year and in the years ahead. It will be achieved thanks to hard work from countless people and several years of effort and investment in order to reach our desired future state operational vision. Fortunately, now that we know TOM’s name, understand TOM’s history, and we appreciate some of the TOM objectives, we are now positioned for more discussions at upcoming CHART-sponsored events and in future CHART publications on this topic.
On behalf of Wilson Elser Consulting, I look forward to sharing more and supporting you, CHART, TOM, and the London Market of the future.
About Wilson Elser Consulting-
Operating as a subsidiary consultancy and global insurance business solutions provider from Wilson Elser, the internationally distinctive U.S. law firm with nearly 800 lawyers and 30 offices throughout the USA and 1 office in London, Wilson Elser Consulting offers unique professional experience, advisory services, management solutions and other non-legal advice and business insights to insurance markets, carriers, and any organization involved in the application of enterprise risk, governance, legal and compliance management; legal operations and legal spend management; claims litigation management; insurance operations and systems; and third-party vendor/expert management by guiding our clients to champion change and generate business value through process, technology, and analytics. For more information, please contact Jesse R. Viani, Director of Insurance Business Services at +1 (212) 915-5298 or firstname.lastname@example.org.
About the Author-
Jesse R. Viani (an American citizen) is a practicing consultant and the Director of Insurance Business Services at Wilson Elser Consulting, a consultancy established in both New York, NY and London UK which offers advisory services and other insurance business solutions to clients all over the world. Prior to assuming this role, Jesse managed client relationships and oversaw complex international software and service implementations, as Global Account Executive, at one of the world’s largest information, software, and service companies. Previously, Jesse was a valued employee and manager at the Am Law 100 law firm Wilson Elser Moskowitz Edelman & Dicker LLP where he led the firm’s e-Business department, overseeing more than 150 successful client billing software implementations. Before joining Wilson Elser, Jesse was a Director of Operations and Systems for American International Group (AIG), working in the Claims Litigation Management department (now known as the AIG Legal Operations Center), where he managed the carrier’s relationships with various software companies, legal bill review vendors and other consultants. Jesse graduated magna cum laude from the Pennsylvania College of Technology with a bachelor of science degree and was a juris doctor candidate at Seton Hall University School of Law.
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