InsurTalk: Implementing new data standards – what is the right path? with James Livett, Executive Director at LIIBA

As the insurance industry faces increasing pressure to modernise and enhance operational efficiency, the adoption of standardised data practices has become increasingly important. A key aspect of this discussion is the dynamics between brokers and underwriters in defining these standards and the necessity of a unified approach.

In this episode, I have the privilege of speaking with James Livett, the Executive Director at LIIBA overseeing Operations, Technology, Placing, Accounting & Settlement, Operational Resilience, and Central Services such as MRC, Velonetic, and PPL. Together we explore the complexities and strategic considerations involved, highlighting the necessity for a cross-market approach to ensure industry-wide coherence and resilience.

Ewa Banaś: Hi, I’m Ewa Banaś and I’d like to welcome you to another episode of IT Insights InsurTalk by Future Processing. As the insurance industry faces increasing pressure to enhance and modernize operational efficiency, the adoption of standardized data practices has become even more important. A key aspect of this discussion is the dynamics between Brokers and Underwriters in defining these standards and the necessity of a unified cross-market approach. That’s exactly the topic I will be discussing today with my guest James Livett, Executive Director at LIIBA, overseeing operations, technology, placing, accounting and settlement, operational resilience, and central services such as MRC, PPL, and Venetic. James, I’m so happy to have you here with me today. Before we move on, could you give a little bit of introduction to yourself? 

James Livett: Okay, so I’m James Livett. One of those wonderful people, I’ve a third-generation Lloyd’s broker, which is quite frightening for me and probably more frightening for my father. Um, I’ve been in the industry for nearly 40 years now, 38 years. So kicking around the trade association LIIBA for 14, so been involved in this. Prior to that, I actually had a real job. I was a broker and broker technician at a number of broking houses across the market, mainly on the reinsurance side, getting heavily involved in some of the largest reinsurance programs in the place. So been about a bit, I think is the simple way of putting it. 

Ewa Banaś: Yeah, definitely. And I have the distinction of actually having been there, seen it, and done it. I think is the symbol definitely is what I bring to the party in these conversations. 

James Livett: Definitely is. And you know, you’ve seen it all, I feel. Not all, almost. 

Ewa Banaś: Well hopefully there’s still something new to see before before I decided to go do something different. 

James Livett: No, looking at how technology advances I’m sure there is. 

Ewa Banaś: Oh when the technology is definitely is. Uh, so James, before we move on to the more serious questions, I have one that has always been very intriguing to me. How big is your Hawaiian shirts collection and how did it even start? 

James Livett: So Hawaii shirts collection runs to about 20 odd shirts these days and um, I’ve got two new ones that haven’t been… haven’t been shown yet. They’re particularly… so that’s almost like exclusive. Yeah, they’re definitely being saved to the right corporate governance meeting. What actually happened was during during the very early days of the pandemic, um, I wore one of these shirts which just tapped out of the cover and my Chief Executive, who uh many of you will know is Chris Croft, does enjoy winding people up. It’s it’s it’s a hobby of his I think. Um, and Chris probably took a screenshot of me wearing the shirt and put it onto LinkedIn and Twitter. It’s, I think say viral is the right phrase, it was one of the biggest shared and hit media posts we had ever done. Um, it only goes to show what the people actually want. Do they want to talk about change, regulation, data standards? No, take the micky out of somebody wearing a silly shirt. 

Ewa Banaś: Definitely yes. 

James Livett: So of course that started and I had two choices didn’t I? I either owned it or fought back and I was never going to win against Chris. So um, I I basically bought a lot of shirts and uh, it’s now… yeah now it’s sort of become um part of my, as brand is the word these days. 

Ewa Banaś: Yeah I think so. That’s quite a story so it was the pandemic that brought that. 

James Livett: Yeah and I think is… I’d be honest with you is, I came to the conclusion very early on is if it made one person smile during that strange time then quite honest… and it’s unfortunately, well is unfortunate, stayed with me. The best I can do these days is some loud socks when I wear my suit. But yeah. 

Ewa Banaś: Perfect, I love that really. So moving on to the more serious part of the conversation, uh, could you give us an overview of the current state of data standards at the London market and also the challenges that you see? 

James Livett: Yeah, so I think if you look at data standards [in] the market, I think first things first, and I’ve said this before—I know you’ve heard me say this before—that we’ve all been using data standards for years. So this isn’t anything new. If if you look at what we’re doing in the Bureau world, you know we’ve been using the LPAN or we’ve been using the LCCF and other similar Bureau forms. Well they’re a standard form so therefore they’re a data standard by definition. So that’s that. But actually when it comes to digitized data standards, many people haven’t realized that things like A&S and ECF, these Standard Market processes we use with what is now called Venetic and formally was Xchanging, we were using them… we’ve been using these to submit our premiums and claims for 20 or so years now. And they’re all underpinned by data standards of one or another. Um, they are very much underpinned in what data is sent down, in what format that’s sent down, and then even down to the documentation and how that’s sent down and how it’s responded to. And funnily enough people don’t even realize that’s necessarily the ACORD standards behind only this little small piece of the ACORD standard rather than the whole GI gambit. Yeah, but it’s we’ve been using these standards for a long long time. So what are we we we… so the state of the market on standards and using standards is actually surprisingly good for that Central service interaction. And I’m sure we’ll come back to that later. But the challenge we have is very few organizations are using these inside their own business. There’s been a lot of success using them within some of the reinsurance world with the Ruschlikon initiatives but less so beyond that. And to a certain extent that’s what Blueprint Two and the like is all about. So it is one of those things, they’re in, they’re being used in pockets quite extensively but we need to drive that out further. 

Ewa Banaś: It kind of must become like a new Lingua Franca so to speak right? 

James Livett: Yeah, yeah. I heard this one [at] our E-talk event this week so yeah that was a nice description. 

Ewa Banaś: Uh, so what are the most significant benefits of implementing this new Lingua Franca? 

James Livett: So the the key benefits… and this isn’t interesting, when it comes to these benefits there’s many many ways you can get a benefit out of it. If you take for example, I used Ruschlikon earlier, you’re talking you’re talking north of 95% cash matching. So it makes the the process much faster. Also, and this is the thing that I’d like to point out when we use the data standard, it’s about sharing that information. That’s what it’s all about at the end of the day. So if you take an Inception date, you take the start date of a contract. So the client has keyed it into their system, then the local broker has keyed it into their system, then the London broker key[s] it [into] their system, and then the underwriter plus another under… another underwriter… another underwriter… and then it goes into the Bureau, they key it… and then it goes across the claims team and they… and then it goes into the reinsurance broker and they… and the reinsurance underwriter… but that’s the same 1st of January 2024. How many times has that just been keyed? How many opportunities to make a mistake is there in that period? So think about that. That is the operational efficiency gained by sharing that data and allowing everybody to take that data, be keyed once rather than many people keying it. You’ve done two things: you’ve removed ability… you’ve removed the chance for error, or at least eventually you’ve got it wrong, you’ve got it wrong once… everybody’s got it wrong and that’s much easier to unpick. Or, um, you’ve you’ve you just saved somebody typing. Now I know it only takes a couple of seconds to type a date. You take that couple of seconds times the tens of thousands [of] policies we have in the market… the tens of thousands… so there’s an operational efficiency piece there. There’s an E&O piece which I just touched on there. There’s the other piece which is taking that data: if it is all in a format that you can share, exchange, um, and use, it will allow you to analyze and review your book of business. Analyze the premiums, look for trends, look for exposures, particularly with with any losses coming down. If you’ve got the data in [the] right format… at the moment it’s in disparate databases, disparate approaches, nobody can do do that. So if we can get it all into one place we can do far greater than us. The recently published LMGS… the Lead Match report… so much of that is manual effort to try and get that work done. You know Caroline and her team have done a great job bringing that together as they always do and it’s a wonderful report, but it takes a lot of manual effort to get there. Wouldn’t it be great if we actually have that almost as a dashboard? We could only do that if everybody’s actually feeding those data standards. 

Ewa Banaś: Mm, wow, that’s quite an overview. 

James Livett: Should I get off my soap box on that one? It’s that, and in all honesty, it is the realization of that fact as to why I’m very passionate about the modernization of the change and bringing these data standards in. But having said all of that, those data standards, they always need to be invisible. They just have to be there. They just have to be there to enhance, to help, to support basically. I mean that’s… I’ve often the analogy I’ve often used: these mobile phones. You know I’ve got my Android phone in my pocket, it was iPhone, assuming it is an iPhone… is how do they communicate with each other when they use completely different software language? Data standard that Android deal with… and so Lingua Franca it is. 

Ewa Banaś: So who should actually drive the adoption and the you know definition of data standards at London Market? Lloyds or Underwriters? 

James Livett: Both. Both. Okay. Uh, and it’s actually not them, it’s not just them. It’s so the the vendors, the platforms, the operations people, it needs to be everybody, is a simple answer. But we have a great advantage in London compared to many of our captive hubs which is London still has this thing called The Bureau or Venetic or Xchanging or LPSO… depending on which particular vintage you are. But ultimately they are the central body. And also we have a Whitespace and we have a PPL on the placing side. Because this is where we get into that wonderful world we can start bringing it all together. Those vendors and those organizations are probably north of 80% of the transactions we do here go through those entities. So if we make they get them to use to trade those digital standards, Brokers and Underwriters on both sides interact with those standards. So therefore you start building out that economy as opposed to go through the Ruschlikon [where] we are picking off one organization at a time, which is a far greater overhead. So we have an ability to deliver this quicker because we have the [Central Services]. I think that is actually very valuable to we can offer how we make this happen. But as who defines it? I mean in today’s governance world is ultimately there are and numerous committees that sit together that when, I will confess, it’s very often you sit there and you do wonder whether it’s the usual suspects. But that’s probably because we’re all the people that are very passionate about it, which is why we put our hand up to do it. But that also means fact that we actually have a very collaborative um ecosystem when we come to talk about this. 

Ewa Banaś: And I guess that leads us to my next question of the role of MRC and CDR committee who have just recently been merged right? And the fact that you know they still report to Data Council. How does it all work? 

James Livett: So this is the this is the fun one. How does it all work? There’s a question. Uh, the so first things first, so the LMG actually own the MRC, so that’s a subtle difference in this one. So that’s technically owned by the LMG. The MRC committee, and I can talk quite extensively about this one because I must have done something very very bad in the previous life because I chair it… 

Ewa Banaś: What? Yeah. 

James Livett: So maybe maybe it was 25 years of actually drafting MRCs that did something to do with that. So the the MRC committee we have now just formed it um in the last six months or so. Um, I’ll come to the CDR committee as well. So that committee meets regularly, it’s monthly meeting. What we’ve got is we’ve looked [at the] backlog that was gathered from where we did the MRC creation and that backlog was, which has got questions in there… and it’s it’s what you would expect from one of these backlogs. And one of these questions is, some of them are brilliant, some of them are mad, and some of them… but they have to be there and through questions. So we’re working our way through that backlog, there’s a couple of hundred items on there where it’s interesting because we’re also finding some of them just suddenly come together. Um, so we’re meeting monthly, we go through that. In fact our meeting was two days ago so we just have one where we we had um probably 40 minutes discussing the thorny subject of sections. So anybody who understands some of this stuff who’s watching this has suddenly laughed because they know how difficult it is to even define what a section is. Um, and no we didn’t finish the conversation, we didn’t fully come to conclusion, we’re getting there. Yeah. Um, but the other side of things we were looking at was some of the items within the MRC and how it links to some of the lists which then segues into the CDR. And we’re looking at it from from the MRC is very much the practical how the rubber hits the road. The CDR is, and the client facing document… don’t forget this MRC is a client facing doc… whereas the CDR is more to drive the premium claim transaction. So it’s some they they won’t ever be fully [meeting]. I’m sure lots of people want to have this wonderful Nirvana, and if I’m wrong I’m wrong, hands up, but I can’t see it happening in the short term. This digitized future is going to have to have some manual intervention whether people like it or not and part of it is because of the different functions what CDR is and what [MRC is]. So the CDR committee again that is um up and running. It’s chaired by Cassandra who was at your event on Tuesday. Uh, that that committee meets and it’s again it’s a monthly one going through the thorny topics of the CDR, what is and what it is, and it also what does some of this mean. But it’s interesting how we’ve suddenly all hit the same, not barrier, we’ve always hit the same point and we need to tidy this whole piece up because that’s actually impacting the MRC. And that same… and I hope by the time this actually goes out I would have had time to talk to both Cassandra and Clarissa called otherwise this is the first they hearing about it but there we go. 

Ewa Banaś: Could get me into a lot of trouble. We can align on that, don’t worry. 

James Livett: So you know we’re working our way through this stuff and it’s a it’s it’s a tricky job. But I mean here’s one thing we are just about to release um in fact the circular is on my desk ready to go out. Um, we’re about to put a market communication out there because we’ve under the LIIBA website is there will be a place for people to raise questions on the CDR, on the MRC, um, add items to the backlog, and actually see how we’re clearing the backlog. That’s literally about to go live right now so… 

Ewa Banaś: Wow the future is shaping as we speak basically. 

James Livett: Part of this is the fact that I think, and I’ve been involved in doing MRC since joined LIIBA 14 years ago, actually getting the market to contribute to things like MRC and CDR… unless we get them all in a room it’s always been very difficult to get the contribution. Which goes back to your comment of how do you define the standards, who creates them. We’re giving people the opportunity to actually contribute to these things. And you know what, somebody wants to write [that] this is [a] load of rubbish then they’re more than welcome to if they can justify [it]. A little think about what i’ hope is some people say yes you’re doing the right thing, that’s what I really would like. So that’s how the CDR on the MRC committees [are], they’re running, they’re up and going and we’re chunking our way through it. It’s it’s a long job but at the same time I think that’s also key to point out this is not a a one shot [deal]. This is evolving and we’ve got to keep this involving. So anybody thinks the MRC version three is the last one? No. There’ll be a 3.1, there’ll be a 3.2. But I’m not mean enough to issue them that close together so you probably won’t get a 3.1 till next year. You might get a little bit of advice and guidance notes over this year just for common problems. 

Ewa Banaś: Wow that’s that’s quite a story. It all really today Jaz but uh but yeah it’s quite job. I mean it’s is your daily life basically that you know you have to handle anyway. So I… 

James Livett: Yeah I mean I do some size points, I’m a professional meeting goer. 

Ewa Banaś: Moving a little bit more to the technology side of things, uh, could you give us an example of like a successful implementation of of those data standards that you know talking about but outside of London Market that actually the London Market could learn from? 

James Livett: So I think the simple answer that is Ruschlikon. It is that simple. It is the you know the very the great success at least you know this answer is simple. This is the really simple answer. You know and obviously Mark Bell from ACORD was presenting [at] your event on Tuesday. I mean know the Ruschlikon initiative, I mean he’s been kicking around as I commented at the time about 20 odd years and it’s got traction there with some of the largest reinsurance Brokers and Underwriters across Europe. And you talked to some of the people involved in that program, I’m sure that Simon Squires at AXA XL will talk to you for days on this one as with Richard Brame at WTW… the Terry Kord but G Reed… all of these guys, girls who are involved in this thing they have been are very passionate about this and they can prove and show how fast and well this is uh working for them and the operational benefits. I think on top of that there was a London Market attempt to do this previously called e-accounts which which floundered for a number of reasons. Um, I could go into them here but I’ll probably get myself into trouble um so I won’t. Uh, but they were used by one or two Brokers and one broker who used them was he just they just said to me you know this is 90-95% cash match and this is just making my efficiency process so fast and that was the key thing about it. So they are successfully used. I think people look at it and go it’s new and it’s difficult but it’s not. 

Ewa Banaś: I think guess the final question for today because uh Sharon also mentioned that. I really like her um description of what happens if data standards… if someone does not actually implement the data standards. And she said yeah they will live 20 years in misery. There is a long truth in that statement. 

James Livett: Yes so I was wondering what are the risks of not implementing, like actual risks, and how to mitigate? I think goes back to that point of we have the Bureau and we have the uh the placing platforms which is almost going to force the issue. So I think there’s less of a chance of it not coming in but what would happen if you don’t do them? And bear in mind we are a microcosm of SMEs so a lot of these smaller firms probably won’t invest huge amounts of money but they will wind up using these data stands without realizing. But the problem is you’re going to be sitting there doing this manually. It is that simple. You’re going to have to do them on… with I’d say paper but obviously it’s a computer producing a PDF. And at some point, purely from a cost perspective, you can see that the carrier community, the LMA, the IUA, um Lloyd’s itself who ultimately pay for the Bureau of services will say “we’re not accepting the old manual process”. So 5 to 10 years time I can see we’ll all be using them completely without even thinking about it. I would say within 5 years we’ll probably turn off the ability for Market practitioners to interact with the Central Services without using those standards in one form or another. And don’t forget a portal could use those standards, it doesn’t have to be yeah a pure technology play. 

Ewa Banaś: Thank you James for all the insights you shared with us and you know all the overview of the market. I really really appreciate it and thank you our audience for listening to yet another episode of IT Insights InsurTalk by Future Processing. See you next time. IT Insights Talks on business and IT challenges with tech leaders. Visit us at ITinsights.tech and dive into our podcasts, webinars and events.