Kinnect has granted the multi-million pound contract to radically overhaul its existing IT platform to Indian outsourcing company Tata, according to market sources.
Tata is understood to have won the tender to re-code the entire Kinnect infrastructure to Microsoft.net, over technology firms including Wildnet, Logica CMG and existing supplier CGI.
Kinnect is the electronic platform that allows the capture, transfer and processing of risk data for commercial lines in the Lloyd's and London insurance markets.
An industry source said: "The problem is that Kinnect has been run as a charity, not as a business. It has been difficult enough to manage [previous IT provider] CGI, which is in the UK, but managing a company in India could prove even harder."
Kinnect's total cost to the market since its 2003 launch is estimated at between £80m and £90m.
The source added: "The existing platform suffers from massive problems of flexibility. If changes need to be made they have to be done by CGI and that can be expensive and time-consuming. MS.net will allow a more responsive system."
The appointment of Tata, whose clients include Prudential and Royal & SunAlliance, is likely to be a major talking point at the Lloyd's Franchise meeting held today.
Consultant Roger Foorde said: "Kinnect started by using the wrong code in the first place, which sums up the whole process. But a more fundamental problem is the lack of appetite outside of some of the global brokers for the system at all."
By May 2005 Kinnect had only handled around 500 risks in North American property, representing some $800m in premiums.
Toby Davies, who resigned as Kinnect chief executive earlier this month after just 18 months in the job, said in April: "Kinnect cannot succeed without genuine, active commitment from customers."
A Lloyd's spokeswoman said: "The outcome of the tendering process is not yet determined."