Outstanding Loss Reserves

Introduction
There is an obligation on Lloyd’s leaders to update and accurately record movements on outstanding losses with a Lloyd’s market involvement in excess of USD$150k or GBP£100k but this only scratches the surface of the market problems with outstanding loss reserves.

Objective
To provide our clients with confidence that their reserves are up-to-date and accurate but an additional benefit is that it will identify a substantial number of files, which have been closed, either because the broker has not advised that the loss has never come to fruition, i.e. it was perhaps precautionary, or because the loss has been settled but the reserve has not been removed.

The likely result of the exercise will be the release of millions of pounds in redundant reserves, although, of course, this cannot be guaranteed.

Service
XCS is currently working on behalf of a number of managing agents, in their role as leaders.

JMD offer a more bespoke service to individual managing agents because work is performed regardless of whether our clients lead or follow.

We update and accurately value the amounts held in reserve by our clients, and the key benefit of our service is that we ensure that all of our clients’ claims are regularly reviewed and updated – not just those which they lead.

We are able to offer this service as a ‘one-off’ to bring the records up to date and hand the ongoing work back to our clients or we can also perform the ongoing work, which ensures that the claims records remain up to date and accurate.   

A number of managing agents are currently maintaining millions of pounds in reserves which have not moved for more than one year and in our experience there are many reserves which have not moved in several years The work which we perform has enabled our clients to pro-actively deal with their problem and any reserve, which has not moved in more than 12 months, will be ‘cleansed’ and an up to date reserve figure provided.

We would emphasise that our work has in no way impeded the day to day activities of the claims department. This is a service which requires full time attention and it is generally extremely difficult for managing agents to commit sufficient resource to enable them to satisfactorily undertake this work themselves.

Finally we would emphasise that, because of our existing infrastructure, our relationships within Lloyd’s brokers and a system which enables us to quickly and easily record data and report to our clients, we are able to offer this service at what we believe is an extremely competitive price.

We will, of course, be pleased to provide references if required.