DA SATS – A pathway to reducing operating expense?
The Lloyd’s Market Association (LMA) recently posted a DA SATS* Endorsements update on the blog section of its website that should be of real interest to Managing Agents, Coverholders, and brokers, in fact pretty much all the London Market really. Alas I fear that the hard work done by Tom Hamill and others at the LMA and beyond isn’t perhaps immediately consumable into practice by colleagues in their day to day working lives across the DA space as they feverishly work through the mountain of information, regulation and procedure that is ‘the job’ of a London Market DA Manager here in 2019.
Basically, we have referencing as to where DA SATS is to be used for bordereaux management on specific contracts, and how the relevant parties should carefully consider which roles should be undertaken by each stakeholder. There is a huge amount of work that has gone into this tech enabling market provision and it does in many ways move things forward but only if it is used, either directly or indirectly as an engine to produce the data needed to effectively manage Coverholder business and written under legal, fair and binding contracts and wordings.
Where bordereaux are to be managed (mandated) through DA SATS, the LMA – in conjunction with Lloyd’s Brussels Subsidiary (LBS) – have drafted clauses for attaching to model binding authority or Coverholder appointment agreements, which lay out which party is responsible for each role. The clause also reorders the existing ‘Reporting, Records and Aggregate Exposures’ sections to more clearly delineate between reporting information and accounting requirements.
This LMA DA SATS update is an opportune moment for companies to understand their fixed operating costs and to apply the disciplines required with which to drive a business forward in the current environment and perhaps also somewhat timely, given John Neal’s comments in the trade press article; ‘his vision’ for the future of Lloyd’s and his desire for a more efficient and commercial marketplace in which to trade and thrive.
Binding Authorities / Delegated Authorities represent (circa 30%) a huge part of the market so the opportunity at every level of the distribution cycle to extract value from improved efficiencies are staggering. DA SATS and the other market services delivered through LM TOM are there for use. You know what they say about you being able to take a horse to water…..
*DA SATS was launched in late 2018 as a platform to assist the market to manage bordereaux information and data gathered under binding authorities, utilising market InsureTech to facilitate and transform the data into something consumable and actionable.
Note: MOTOSI Consulting has conducted an exercise to understand the fixed costs associated with managing binding authority business in the London Market.
For more detailed information on MOTOSI Consulting’s approach to refining operating models and understanding where operational expenses are best controlled or resources invested in then please feel free to contact me. [email protected]