Electronic transition gains pace
At long last, the electronic trading argument seems to be sticking. After several years of trying to convince the Lloyd's and London market of its merits, the momentum is gathering pace.
Evidence of this "transition", as opposed to a "big bang", is all in the numbers.
According to the Accoun-ting and Settlement Repos-itory Board, a quarter of all premium transactions in the London market will be handled electronically by the end of the month.
Since January, the number of daily transactions is said to have almost doubled.
Combine this with the growing use of the electronic claims files (ECF) repository and the scars of bygone electronic projects appear to be healing.
So much so that pressure is now growing from brokers for Lloyd's to require the market to process all claims electronically by the end of 2007.
Calls have been made for a timetable to be outlined by the Franchise Board on when it intends to achieve this.
This comes on the back of the Market Reform Group's target, later ratified by Lloyd's chief executive Richard Ward, that all claims should be transacted using the ECF repository by the end of 2007.
But since Ward's statement in October 2006, concern has mounted among brokers about the level of commitment by the entire market.
"Mandating is necessary for all of the laggards," insists one broker. "But we need to have at least 12 months notice from Lloyd's. We do not want people scrambling around trying to implement systems."
Another Lloyd's broker adds: "A lot of people have been cut before by failed projects and although we are supportive we will not invest in a process that doesn't work."
David Harries, Amlin group operations director, who has been seconded to Lloyd's for six months to help drive forward business process reform, is understood to have written to all managing agents to secure their commitment.
But, since the ECF repository was fully integrated at the end of December, only 220 claims have been transacted electronically. However, supporters point out that more than 2,000 have been transacted electronically through the marketplace overall.
Trevor Maddison, of Marsh, who is chairman of the London Market Brokers' Committee's (LMBC) broker electronic file implementation team, insists that Marsh will submit all new claims by the end of the fourth quarter, using this method.
He envisages that between 70% and 80% of claims, around 60,000, will become paperless within the next three years.
Despite concern among small broking firms that the number of claims handled does not justify the cost of implementing such a system, the LMBC is keen to drive the marketplace and its 187-strong broking community to quickly embrace ECF.
With managing agent support, this in turn should bring a slicker claims process and taken with premium transactions processed electronically, it counts as a significant shift in Lloyd's way of thinking. IT
