Managing agent says Xchanging contracts are inefficient
A leading chief executive at a Lloyd's managing agent has complained to the corporation about new processing contracts with Xchanging Ins-Sure Services (XIS).
"The new processing contracts market participants have signed are not satisfactory," the chief executive said this week.
The chief executive blasted the new processing contracts for their inefficiency.
"If there is, for example, a financial institutions risk for a bank in 30 different countries and there are ten insurers on the slip covering the risk in each country, the market ends up paying for 300 transactions," he said.
The chief executive added that, as a company, the fees the managing agent was paying to XIS had increased by more than 30%.
"Last year, we were paying £150,000 in fees, but this year we're paying £200,000."
He said the company had made a complaint to Lloyd's and was awaiting a response.
An Xchanging spokesman said 90% of the market had committed to the new contracts with XIS, which were negotiated, with "complete transparency", with the Lloyd's Market Association (LMA).
"There has been a 6% discount on service charges," the spokesman said, though he conceded that there had been "winners and losers", under the new arrangements.
He added that a discount of £843,000 had been returned to the market.
The spokesman said some managing agents may be paying more in fees because a repository contract had been included in the new agreements between XIS and Lloyd's, which meant payment for new services was included in the contracts.
An LMA source said only two managing agents had not committed to signing the new XIS agreements.
"Several managing agents had issues they wanted to raise and these have been resolved," the source said.
