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Eliminate the agony of bordereaux

Note: Advantage/DA Portal has been renamed to LIBRA.

London is awash with bordereaux. How many? My back-of-the-envelope reckoning estimates 23,000 claims bordereaux are received by London underwriters each month, based on about 9,000 live binders, with two or three open years for each. Of course, most binders require monthly premium and risk bordereaux too, so add a few tens of thousands. An outrageous number of spreadsheets is processed by the London market every month. It’s a massive waste of everyone’s resources.

The market has data standards with DA SATS, and Lloyd’s has set (and repeatedly re-set) the minimum coverholder and TPA DA reporting standards. However, many DA holders do not understand the requirements, or cannot (and in some cases simply will not) comply with them. That means the market isn’t getting what it needs. Coverholders and TPAs often aren’t getting what they need either. Many insurers delegate authority to pay claims up to $50,000 or even $100,000 from a dedicated loss fund. About 20,000 such funds are live around the world. To keep them topped up, the TPA or agent files a monthly bordereau that details claims paid. Each bordereau is checked before it is passed to the broker, checked again, amended, processed through central settlement to trigger payment by insurers, and – finally – passed to the TPA or coverholder to top up the loss fund.

The system has worked this way for decades but is not without problems. Volume, poor data quality, and limited broker resources mean bordereaux are often delivered, reviewed, or processed much later than intended. Many TPAs have had numerous bordereaux outstanding for six months or longer. When that happens, timely loss-fund top-ups do not occur. When the fund is depleted, the coverholder or TPA may not have sufficient carrier funds to pay claims. Frequently – if understandably begrudgingly – they settle urgent claims from their own working capital, then wait to be reimbursed. It is far from ideal.

Advent’s Advantage DA Portal was built with the agony of bordereaux in mind. Reports need no longer move through the hands of each and every participant in the value chain, consuming their resources voraciously only to deliver sub-standard results. The system eliminates the processing burden for everyone and deposits it with a trusted third party (Advent!).

Each claim attaches to the correct binder and year of account, and validation is performed immediately when a claim is entered. The system then produces Lloyd’s MSR v. 5.2 bordereaux report. Through the international payments system Vitesse, DA Portal is linked directly to carrier-controlled loss funds which can be accessed from anywhere for swift top-ups in almost any currency. The result is better and faster validation, more accurate and timely bordereaux, dramatically improved reconciliation of loss funds, and an enormous cash saving. Same-day settlements can be paid to insureds the same way.

All that’s missing is a central bordereaux processing and settlement organisation. That requires only agreement and access to the market’s central settlement infrastructure (which, incidentally, Advent already has through its Gemini II Claims Expert platform with the LMA).

We hear that bordereaux delivery volume has dropped off a cliff since the Coronavirus. We can take the pain away and get people up and running on the Advantage DA Portal in days, often within 48 hours. We can even do it remotely. All we need is electronic copies of the binder contract and the most recent bordereaux. If you want that, let us know. Advent will quickly remove the agony of claim bordereaux from your daily life.



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