I notice that one of Roger Oldham’s (Head of Market Practice at HSBC) wishes in his recent presentation to the Market Reform monthly forum was for the introduction of true electronic accounting across the Market as quickly as possible. I also noticed that the accounting and settlement page was the third most popular page on the Market Reform web site. I think this makes perfect sense. Accounting and settlement seems to me the obvious choice for an electronic trading ‘Trojan horse’: it has the potential to bring significant efficiency returns by removing mundane, repetitive, manual tasks and it does not have the emotional ‘baggage’ that electronic placing does.

A significant proportion of the current assignments being undertaken by Scyllogis involve EDI initiatives between our customers and their brokers, underwriting agents, scheme managers and even branch offices.  These projects are a mixture of data exchange for submissions, bound business and accounting and settlement (no claims yet – maybe they don’t have any?). Of all these, accounting and settlement has proved to be the easiest technically, whilst still delivering benefits in efficiency and accuracy. Having a mechanism to automatically process data through back end systems means an ability to scale up the business without doubling the accounts department. Another advantage is that there also seems to be more agreement about what data constitutes a closing or cash remittance as compared to the discussions that surround the format of a policy or claim.

We do, to some extent, tend to ‘reinvent the wheel’ for each client, as currently all their senders of data use their own format. It would of course be far better if they all adopted ACORD standards, but that is not going to happen overnight. To ensure minimal ‘wheel reinvention’ we have architected the solutions in a layered fashion that separates the incoming and outgoing data manipulation from the ‘back end’ system that receives or produces the data. The layered approach also allows us to ‘plug in’ data reformatting modules to cope with the varying incoming formats. ACORD would simply be one of these formats and so we feel the overall architecture is reusable.

One of the projects will, fortunately, utilise ACORD data standards to automate a dialogue between carrier and in this case program manager, during the submission process to effect automated clearance. We expect to be working together with the WebConnectivity guys in this regard and we look forward to that.

It seems to me that moving to ACORD standards is a ‘no brainer’ and the quicker we get the London Market settlement messages into ACORD the better. For companies operating within and without the London Market it allows them to architect the same solution that will work for the London Market and for peer to peer initiatives in their operations outside of London, so long as their business partners have the same vision, obviously.