LONDON (Reuters) – Lloyd's insurance market of London (SOLYD.UL) is planning to launch two electronic exchanges next year as part of its three-year reform, he said Monday, and he's seek to achieve competitiveness from low cost competitors.
PHOTO FILE: Lloyd's Building in London in London City financial district in London, Britain, February 1, 2018. REUTERS / Simon Dawson / File Photo
Lloyd, who is composed of 99 syndicated members and focuses on large commercial insurance, suffered two years of severe losses from natural disasters and there is uncertainty about the British departure from the European Union.
It is moving slowly to process some of its trades online, but many market participants are looking for faster market shifts, where many businesses continue to face business in the City of London tower.
Simplifying and automating its processes could reduce the cost of doing business at Lloyd to 25-30% of premium income, compared to a current 40%, saying in an update on the setting of a new strategy. out in May.
“We want to take a step in the right direction,” said Lloyd's chief executive, John Neal, with Reuters, adding that the initial estimates for the costs of the changes were in the “hundreds of millions of pounds” pounds.
One of the new electronic exchanges will focus on simpler risks and the other on more complex risks, with “early buildings” in place by December 2020, said Lloyd. Improved technology will be implemented in 2021 and 2022.
Lloyd said that he could use surplus funds to pay the changes, raise senior debt or secure business against future income flows, but would not increase the levy he imposes on members.
In an attempt to compete with venues such as Bermuda, Lloyd is trying to attract participants who offer insurance-linked securities such as disaster bonds.
Also, syndicates have the ability to establish without a physical presence at Lloyd's.
Lloyd said on Monday that the Munich Re reinsurance group, which already has a presence in Lloyd, was establishing the first remote syndicate-in-a-box that will focus on newer areas such as renewable energy. .
Some smaller brokers and insurers, who have fought hard in recent years, are concerned that there will be no place for those who have a new look.
“Advocacy should not be effective,” said Simon Matson, CEO of Gallagher UK broker.
“Our role as brokers is, and will always be, an advocate for the customer.”
Neal said Lloyd wasn't trying to exclude brokers in his attempts to streamline the market, but they wanted to get their input.
“We want to bring the brokers to the tour with us.”
Reporting by Carolyn Cohn. Edited by Jane Merriman
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