EDIs

Standard EDI messages

Electronic Data Interchange (EDI) messages are a standardised electronic communication method used to exchange information and data in a structured format between software applications. This method has been used since the late 1980s.

EDI messages are used in the London Market both to input data into Velonetic software applications from customers and as outputs from Velonetic applications to customers. There are individual messaging standards per transaction type (e.g. premiums signing, claims settlement etc), per market (Lloyd’s, LIRMA and ILU), and per participant type (broker or carrier). For example, a WSETT EDI message is an output to carriers with LIRMA market transactions settlement information, a USM EDI message is an output to carriers with Lloyd’s market transactions signing information, and a LIMCLM Input EDI message is an input message from brokers with claim advice information.

EDI messages are exchanged between Velonetic and customer software applications using file transfers, through a Secure File Transfer Protocol (SFTP) gateway. Some EDIs are ‘batched’ and include data for multiple transactions within a single file. For example, a WSETT is produced daily and will include all LIRMA settlement transactions for that day. Others are more ‘real-time’ representing actions taken by one party responding to another; for example underwriters responding to a claim submission or outwards reinsurance transaction.

The main business purposes of London Market EDI messages are to share information among brokers, carriers, and Velonetic; and to make sure all software applications are reconciled with accurate and common data. For example, once Velonetic signs a premium settlement, EDI messages are sent to brokers and carriers will include a signing reference, signing date, and ‘actual payment’ date for the settlement. Most actions performed by Velonetic services result in outputs that end up as data fields in an EDI message for brokers and carriers. EDIs are the most widely used message standard in the London Market.

Messages in scope for Digital Processing Services (DPS) Phase one

All standard EDI messages are in scope for Phase one and have been since the inception of the Digital Processing Services build programme.  Bespoke messages were originally stated as out of scope, as one of the main principles of the programme was to introduce data standardisation. In Q4 2023, based on customer feedback, Velonetic, the Market Associations, and Lloyd’s decided to add a selection of bespoke EDI messages to aid adoption. To balance message standardisation against the number and complexity of the full range of bespoke messages, a decision model was applied to support the most widely used bespoke messages.

Out of ~158 EDI currently supported messages used in connection with in the mainframe-based existing services, Velonetic is planning to  support 67 messages for the digital processing services delivered in Blueprint two, phase one. Please see the illustration below for more detail of the supported messages as at 22 November 2024. The development of the bespoke EDI and ACORD4ALL is supported by a financial contribution approved by LMA and IUA and Lloyd’s. These include compressed standard format DSIGN, WSETT, and IPCDSM messages.

Velonetic has set out to maintain the structure, format, and content of the messages as closely to the original messages as possible. However, there will be changes to the messages, including sequence numbers and mainframe references.

For those firms that would like to analyse the difference between the nearest supported message against an unsupported message, Velonetic offers the option to receive both versions via the current mainframe-based existing services. These can be requested at no extra cost for a 4-week period and participants can request this service via their Velonetic Customer Relationship Manager.

Testing

All supported EDI messages will be available for testing during the different phases of Vanguard testing, LIMOSS Controlled Customer Testing, and Enhanced Testing to demonstrate their successful transfer of data. Different messages will be introduced into testing throughout the testing cycles and details will be confirmed as the market progresses through testing.

So far, testing has helped to highlight discrepancies between the production messages in use today and published specifications, although this amounts to just 16 field corrections across11 messages. Two revised messages specifications were published on 20/11/2024 and the remaining 9 are targeted to be published by the end of 2024 if possible.

Testing may continue to highlight minor changes to align the specifications to the existing production messages and any changes will be highlighted to the market as they are published.