Making delegated authority data exchange simple

InsTech’s Ali Smedley recently sat down with distriBind’s Charlie Rock to discuss the challenges with delegated authority data, the recent developments with Lloyd’s core data management service and how distriBind can help.

The delegated authority data challenge

Delegated authority refers to a contract that allows insurers to outsource their underwriting to MGAs or Coverholders. The delegated authority underwriting process has many stages, increasing the opportunities for mistakes.

Brokers, MGAs and coverholders need to provide reports, called bordereaux, to their (re)insurer partners. Bordereaux contain important information about premiums, claims and risk exposures.

By the time the data reaches the insurer, it may have undergone manual edits or rekeying processes by various organisations. This can lead to errors, meaning the data needs to be validated before it can be used for decision-making.

There is also not a consistent standard for bordereaux. Each organisation handling the data adheres to its own set of requirements, impacting the format of the data when it is received by the insurer.

Providing a solution

distriBind provides a digital workbench to improve and automate the exchange of delegated authority data. Charlie explained how the distriBind platform takes a data-agnostic approach:

“We can ingest data from all common formats. We can process risk information from an Excel, premium data that may come in a PDF and claims data via an API. The format doesn’t matter to us; with our intelligent ingestion process, we are able to look for data labels anywhere in the template.”

Removing DDM mandate

distriBind can be used as an alternative to DDM (Delegated Data Manager). DDM is a central bordereaux processing platform that went live in 2018 as a core service within Lloyd’s. DDM, developed in partnership with the market, is a system that allows the collection and validation of delegated authority reporting data.

Following on from an LMA survey of Lloyd’s managing agents, DDM will be removed as a core market service by September 2024. The survey found that managing agents in the London Market would rather DDM was an elective service as opposed to a central market service.

An opportunity for managing agents

Charlie went on to explain what the discontinuation of DDM means for managing agents:

“The core market service change gives managing agents an opportunity to evaluate the different options now available for bordereaux processing.

“distriBind aims to meet the needs of any client, wherever they are on their data management journey. We understand that not every customer will want to process all risk, premium and claims data. Not everyone will want to validate every piece of data either.

“Our modular approach allows us to tackle a client’s challenges on a case-by-case basis without enforcing a data standard.”

Charlie also explained how distriBind deals with data errors:

“Ofter it can be challenging to pinpoint errors within a file. There may be only one small error; at distriBind, our technology does not fail the whole file because of this small mistake. We process the rest of it, letting the customer know where an error has been located and what the problem is.”

Automation, automation and automation…

When asking Charlie about distriBind’s plans over 2024, there was one key theme: automation.

“distriBind’s existing platform already has many automated aspects, but we are looking to expand this further over the coming year. We are aiming to automate the implementation of our solution, more of the data processing and the insights that we provide off the back of this data.

“We are looking to connect with insurers, brokers or MGAs that want to automate any area of their bordereaux management process. For any company that would like to learn more about our solution, reach out to me at charlie.rock@distribind.”