Lloyd's of London is closing down a £70m electronic
platform after only signing up a handful of insurance underwriters
and brokers to use it.Introduced in 2001, the Kinnect system was designed to be a
central electronic hub that traders could plug into to share
documents and files electronically, instead of having to move them
physically from one building to another.
The system was set up to allow risk information to be quickly
shared between underwriters and brokers, enabling them to put
together policies more efficiently. It was also intended to help
Lloyd's meet compliance demands set by the Financial Services
Authority.
The industry regulator has told insurers that by 2007 it wants
all commercial contracts to be finalised within 30 days of being
signed.
The decision to shut down the Java-based system follows a
strategic review at the insurance market earlier this month. A
Lloyd's spokesman said, "One thing that everyone in the market
would agree with is that it needs good electronic trading to remain
competitive. The role of Lloyd's is to set technology standards; it
should not be to build infrastructure."
Lloyd's target was for 70% of insurance contracts to be
processed and recorded over Kinnect by 2007, but only 21 companies
out of 200 have used the system.
A handful of major brokers have used the system, including Guy
Carpenter, JLT, and Marsh and Willis, but take-up remains
patchy.
Some insurance brokers who decided not to use Kinnect have set
up their own independent trading and compliance systems.