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

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By Daniel Hays

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

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

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Lloyd's has created Kinnect to provide technology and supportingservices that enable underwriters and brokers to pass dataelectronically?allowing different IT systems to communicate so riskdata can be sent back and forth and stored centrally in the formateach party prefers.

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Kinnect is described as an international venture, sponsored byLloyd's. It enables commercial lines trading partners to send andreceive risk data electronically for quicker and higher qualitybusiness completion, via the Kinnect Platform.

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

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Ashok Gupta, Kinnect's chief executive, hailed the transactionactivity as "a defining moment" for his company and "a big steptowards our goal?for Kinnect to be adopted across the insuranceindustry, bringing improved efficiency and reducing errors bycutting out the endless re-keying of data from one system intoanother."

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

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

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

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

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Lloyd's said Kinnect is an important element in Lloyd's businessprocesses reform. The system, Lloyd's said, is an effectivesolution to a problem that has long dogged the general insuranceindustry?passing data from systems used by brokers to those used byunderwriters.

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

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

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Mr. Saville said the electronic capture and secure storage ofrisk data was part of the Lloyd's drive to create "contractcertainty at inception," which led to the market's recent adoptionof a new form of slip used by brokers to describe risks to beinsured.

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The London Market Principles LMP slip, which goes into effectnext month, "requires a bit more information and tightensstandards," said Ms. Batley.

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

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

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

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Kinnect began in December 2001, operating under the projecttitle of Blue Mountain. Kinnect currently operates in the UnitedStates with offices in New York, Austin, Texas and Pompton Plains,N.J. and London. More information on Kinnect is available atwww.kinnect.com.

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