Lloyd’s of London today said it will pilot an electronic exchange to handle insurance risks this year.
The 330-year old insurance market said it has taken a 40 per cent stake in an existing electronic placement system, PPL, which will form the basis of its new complex insurance risks platform.
Lloyd’s said it was moving into the delivery phase of its new electronically focused strategy which aims to make it more efficient and cut costs.
“We are now ready to start building the future at Lloyd’s, having achieved three major objectives – securing finance, setting the governance structure and detailing the plan for the next 12 months and beyond,” chief executive John Neal said in a statement.
Simon Matson, chief executive of Gallagher’s UK broking and underwriting business, said: “Making electronic placement the norm across the London market is a crucial component of the future at Lloyd’s as it creates time efficiencies and reduces costs which delivers customer benefits.”
But he warned the market not to move too far away from its roots.
“However we cannot overlook the importance of human discussion and specialist expert counsel which is vital for the complex risks underwritten at Lloyd’s and as such relationships between customers, brokers and underwriters remain the backbone of the London insurance market,” he said.
Separately, Lloyd’s chair Bruce Carnegie-Brown said today it was crucial that Lloyd’s retained the same access to the EU market as Bermuda and Switzerland to stay competitive.
“If you want a global insurance policy that covers EU and non-EU risks, you have to have two insurance policies. That is unhelpful in terms of our competitive position,” Carnegie-Brown told the House of Lords’ EU sub-committee on financial affairs.
It would be surprising if Bermuda and Switzerland continued to have access to the EU market and Britain did not, he said.
“That might pose medium-term disadvantages to us if we don’t enjoy the benefits around equivalence in reinsurance,” he added.