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Jul 1, 2019

London Market Quests for the Holy Grail of Straight-Through Processing

When it comes to straight-through processing, most of us don’t need convincing why this is a good idea. A worrying amount of every pound of premium generated goes toward administration. Everyone agrees that expense ratios have to come down.  And while it’s clear that STP is the only viable long-term solution to tackling this ongoing challenge, very few have actually started to do it.

That’s why it was so inspiring to hear from a range of industry leaders who have. Simon Squires and Helen Griffiths from AXA XL, Tunu Sokiri from BRIT, and Julie Gooch from Willis Towers Watson all participated at the recent ACORD London Quarterly event, "Global Reinsurance and Large Commercial (GRLC) Framework – Empowering London Market Straight-Through Processing."  

Walk before you can run

While the participants approached the topic of STP from different perspectives, as insurers and brokers, as well as from a number of angles – placement, claims, technical accounting and settlement – there were two very clear takeaways that apply across the board. First, these companies have all made great progress towards STP, but none of them has done it overnight. The scale of change can be overwhelming – grappling with unwieldy legacy systems, multiple message types and formats, regulatory compliance and all the rest of it. But the common success factor, they said, is to start small. Focus on one ring-fenced part of your operations and go slowly – run tests, fix bugs and get comfortable with the process. Have a fail-safe in place to flag exceptions that enables you to check anything that you’re not certain about. This will give you added peace of mind. Once you are confident with the process, then roll it out more widely. Obviously, this will take time. Progress will be slow. But even if you start by processing one straight-through transaction, that’s one more than you had before. And guess what? Once you start, the growth rate of STP becomes exponential.

It’s as much about people as technology

The second key takeaway wasn’t so much about technology as the people who use it. These early adopters have found that the costs associated with implementation don’t arise from flaws in the technology or the standards they follow, but rather from human error in using them. This shouldn’t really come as a surprise. After all, people are notoriously resistant to change, and STP is revolutionising systems that have in some cases been in place for generations.

So, as we reach for the holy grail of STP we need to remember that this isn’t just about implementing a system and adopting standards – we have to manage the change around them, shift people’s mindsets, make them aware of the benefits, and provide them with adequate training and support. This is a slow-burn process and something ACORD is committed to for the long term. We have been responding to STP demand by working with our membership to create assets and services that make adoption easier for everyone, and will continue to do so.

Visit to register for ACORD’s next London Quarterly in September. We hope to see you there!