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The Kinnect project, which has backing of £20m from Lloyd's of London, aims to transform commercial insurance from a paper-intensive industry into one dominated by low-cost electronic transactions.
Kinnect said that with each insurance transaction requiring paperwork to be sent through as many as six insurers, brokers and intermediaries, the electronic exchange will bring significant efficiency savings.
"Insurance is a very paper-orientated industry. Data gets re-keyed at all stages of the submission. There is a lot of benefit for the brokers, through being more cost-efficient, getting better services for their clients, making better use of data, and getting their data earlier," said Kinnect's chief technology officer Phil Bungey.
International insurance brokers Marsh and Willis and London based insurers ACE European, Amlin, Beazley and Wellington will be the first to use the system when it goes live later this year.
Kinnect will initially focus on property and casualty insurance and general re-insurance, but it plans to expand into other types of cover as more brokers and insurers sign up to the system both in the UK and the US.
Brokers and insurers will have the choice of accessing Kinnect through a web browser or by interfacing their back-office systems to the service.
Kinnect has developed inferfaces to the Room underwriting system, widely used in the Lloyd's market, and the Rebus broking system. It plans to develop interfaces to up to 12 further systems used in the industry.
The most difficult aspect of the project has been persuading key insurance firms to get on board - a factor which led to the launch of the system slipping from the first quarter this year.
"You get the well-known Mexican stand-off," said Bungey. "We had to cultivate that group of six clients to come together so we could make a sensible launch. That is why it has taken longer, not because of the technology."
A consortium of suppliers led by CGI, Hewlett-Packard and Baltimore finished implementing the system, which is written in Java and runs on HP servers, in May, after nine months of development. It is based on a package developed by CGI.
Kinnect, a wholly-owned subsidiary of Lloyd's, plans to launch the service in the US next year to gain critical mass before expanding into other markets, with the aim of becoming self financing.