U.S. Plant First To Use Lloyd's IT Setup

By Daniel Hays

NU Online News Service Dec. 18, 11:58 a.m. EST?Property coverage for a U.S. factory was the first live risk processed by the Lloyd's of London insurance market, using its new Kinnect Platform, which allows brokers and underwriters to exchange data electronically, Lloyd's officials said today.[@@]

Lloyd's management called the first use of Kinnect on Tuesday a major milestone in the market's modernization efforts. So far this week, no further electronic transactions have taken place, but "enthusiasm in the market has been quite high for it," said Lloyd's spokesperson Melanie Batley.

Lloyd's has created Kinnect to provide technology and supporting services that enable underwriters and brokers to pass data electronically?allowing different IT systems to communicate so risk data can be sent back and forth and stored centrally in the format each party prefers.

Kinnect is described as an international venture, sponsored by Lloyd's. It enables commercial lines trading partners to send and receive risk data electronically for quicker and higher quality business completion, via the Kinnect Platform.

The first use of the system processed property coverage for a Florida concrete plant and involved Lloyd's broker Willis Ltd. and Wellington Underwriting. The covered entity was not identified.

Ashok Gupta, Kinnect's chief executive, hailed the transaction activity as "a defining moment" for his company and "a big step towards our goal?for Kinnect to be adopted across the insurance industry, bringing improved efficiency and reducing errors by cutting out the endless re-keying of data from one system into another."

He said everything the company has done over the past two years, "has been laying the foundations for the first live risk to be placed using our platform. Our thanks go to the Willis team for all their help and support this year."

Willis, the global insurance broker, is one of six initial customers that are set to use the Kinnect Platform. In addition to Willis, the companies that have signed up to use the Kinnect Platform are broker Marsh and underwriters ACE European Group, Amlin Beazley and Wellington. Kinnect, Lloyd's said, is already in discussion with other brokers and underwriters. Further announcements regarding new customers will be made next year.

Richard Bucknall, Willis chief operating officer, said his firm was delighted to be the first user of the Kinnect Platform and "is determined to play a leading role in the use of new technology to improve the efficiency and service of the insurance industry."

Mr. Bucknall said that working with Kinnect, Willis could help better the insurance industry because, "Kinnect enables us to send risk data to a wide range of underwriters, and for the market to respond quickly and efficiently to bind that risk. That can only be good for our clients and good for the industry as a whole."

Lloyd's said Kinnect is an important element in Lloyd's business processes reform. The system, Lloyd's said, is an effective solution to a problem that has long dogged the general insurance industry?passing data from systems used by brokers to those used by underwriters.

Currently, Lloyd's said, when risk data is sent from one party to another, information has to be printed off, faxed or e-mailed, and then re-keyed by the recipient. Management said the process is inefficient, time consuming, costly, leads to large numbers of keying errors and creates a risk of discrepancy between important records of data supporting an insurance contract. Kinnect, it was explained, solves the problem by allowing different IT systems to communicate so that risk data can be sent back and forth, and stored centrally, in the format each party prefers.

Iain Saville, Lloyd's head of Business Process Reform and Kinnect's new chairman said the first transfer of live data showed the industry's commitment to modernize its processes to reduce risk, and improve speed and efficiency.

Mr. Saville said the electronic capture and secure storage of risk data was part of the Lloyd's drive to create "contract certainty at inception," which led to the market's recent adoption of a new form of slip used by brokers to describe risks to be insured.

The London Market Principles LMP slip, which goes into effect next month, "requires a bit more information and tightens standards," said Ms. Batley.

Mr. Saville said he expects the Kinnect system "will quickly build critical mass in the months ahead, so that it becomes a key technology enabler for the industry as a whole." He noted that there are a number of "key players" in Lloyd's working with Kinnect.

This week's first transfer of data by Willis used what Kinnect calls its ?facility product,' specific Kinnect service for risks being placed through an established facility under which general terms and conditions have already been agreed.

The next step will be the transfer of data using Kinnect's ?open market product', which has been created for complex or large risks that are also a part of the London market. Ms. Batley said the initial use of the open market product is expected in the first quarter 2004.

Kinnect began in December 2001, operating under the project title of Blue Mountain. Kinnect currently operates in the United States with offices in New York, Austin, Texas and Pompton Plains, N.J. and London. More information on Kinnect is available at www.kinnect.com.

Special Reports /

U.S. Plant First To Use Lloyd's IT Setup

Related Stories

Recommended For You