Insurance Day - Kinnect’s demise spurs Lloyd’s firms into action

JONATHAN REST reviews developments in London’s bid to find a technology platform that works, 27 March 2006

LONDON has reacted positively to an insurance technology world post-Kinnect and the market has become a hive of activity. In January Lloyd’s gave Kinnect the boot after five unsuccessful years and a £70m ($121m) investment.

But the demise of the trading platform spurred six leading managing agents to find ways of streamlining and improving Lloyd’s market processes. Dubbed "G6", the group was set up last year to work with brokers to develop data standards for the market.

It is chaired by Hiscox chief operating officer Sue Langley and comprises Amlin, Beazley, Catlin, Kiln and Wellington.

It has embarked on an ambitious two-phase project. Phase one will see the group complete data standardisation by June for slip handlings and broker and underwriter references, along with other items of information needed for the claims placement process.

Phase two, which has not yet been given a deadline, will see data standardisation for claims direct settlement, also known as accounting settlement. Kiln chief executive Edward Creasy says the G6 has already made progress in meeting the Financial Services Authority’s demands for contract certainty.

"We [the G6] have come up with a database of wordings that have now been transferred to the London Market Association as part of the drive to contract certainty," he says. "We must push to move the market forward."

RI3K, the trading platform long seen as the challenger to Kinnect, has become an attractive solution since the latter’s fall from grace.

It is one of the few trading services used by the market and has more than 150 companies signed up to use the platform, including insurance giants Aviva and Ace as well as broking’s big three - Marsh, Aon and Willis.

Brit, which owns 85% of RI3K, has confirmed a number of companies have been interested in acquiring the platform, and last month New York-based insurance analysis group Advisen was said to be a serious contender. Brit has always maintained that if it could be seen to neutralise its position in the company, the platform would become more appealing to rival insurers.

Allianz Cornhill chief executive Andrew Torrance has been quick to promote imarket, the e-commerce portal, as the one electronic trading system that "actually delivers", while some companies have moved away from "market-wide solutions" to establish their own platforms for specific areas of business. And broker Benfield launched eCatFac to simplify the placing of facultative reinsurance for cedants with large catastrophe exposures.