Lloyd's pulls plug on £70m trading system due to low usage
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.
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.
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