Lloyd’s of London is closing down a £53m-plus electronic platform after only signing up a handful of insurance underwriters and brokers to use it.
The Kinnect system was first introduced in 2001, and was designed to be a central electronic hub for traders to plug into, using it to share documents and files electronically, instead of having to physically move them from one building to another.
Kinnect was set up to allow risk information to be quickly shared so that underwriters and brokers could efficiently put together policies, and to help Lloyd’s meet compliance demands set by the Financial Services Authority.
The aim was for 70% of insurance contracts to be processed and recorded over the system by 2007, but only about 20 companies out of a possible 215 are currently using the system.
Last spring Lloyd’s executives were highlighting the benefits of the system. Iain Saville, head of business process reform at Lloyd’s, told Computer Weekly that Kinnect would help Lloyd's prove to the Financial Services Authority that it is taking risk assessment seriously.
He said Kinnect would also reduce the number of errors made during negotiations for insurance policies, and keep an electronic record of discussions between brokers and underwriters to reduce the likelihood of disputes.
Kinnect is based on Java 2 Enterprise Edition technology and internet data standards Soap and XML.
Most Kinnect messages have been accredited by Acord, the international electronic messaging standards agency for the insurance industry.
"The FSA has said that by the end of this year it wants to see an end to the 'deal now, detail later' culture in the insurance industry," said Saville.